Managing Through Crisis: Lessons from World War II
During World War II, Procter & Gamble had to retool its factories, cope with broken supply chains, and rethink its workforce management. Sometimes crisis can create stronger companies.
May 6, 2020
It was a time of uncertainty. Businesses had to make huge adjustments with almost no notice. Their supply chains were in upheaval, and even established organizations couldn’t get parts or ingredients. A huge percentage of the workforce was away, requiring company management to question its assumptions about how to continue production, whom to hire, and how to motivate and protect an anxious staff. And at a personal level, everyone was worried about the people they loved, anxious about losing someone who was in danger’s way.
That situation describes our scenario today, as we all do our best to cope in the midst of a pandemic. But it also describes the early days of World War II after Pearl Harbor. As explained in Rising Tide, Lessons From 165 Years of Brand Building at Procter & Gamble by Davis Dyer, Frederick Dalzell, and Rowena Olegario:
The crisis tested the ingenuity of managers and researchers alike, as the company scrambled to reformulate, retool factories, scrounge up supplies, and keep enough workers in the factory to continue making soap and shortening. Some brands were discontinued for the duration. Chipso, for example, disappeared from store shelves, never to reappear.
Although no one realized it yet, the entire laundry market, and indeed P&G itself, was about to enter another period of intense strategic flux. While the war consumed nearly everybody within the company, a few researchers in the lab were achieving new breakthroughs in formulating synthetic detergents capable of heavy cleaning. Things were never going to be the same again.
Fortunately, there are leadership lessons from P&G’s decisions that can guide us today, thanks to its exhaustive archives. If nothing else, it’ll reassure you that we all can get through this.
Keep innovating — and not just for today
P&G’s experience during wartime shows the positive results when a company doesn’t put innovation on hold during a crisis. Cope with the emergency, certainly, but make sure that you’re thinking about what’ll be needed after the crisis.
In some cases, innovative thinking requires developing solutions for the problem at hand. Later, they can take the time to figure out how to use the short-term solutions in peacetime, or whatever follows as the new normal. For instance, during World War II the Procter & Gamble chemists advanced plastics research using three basic materials that were important in wartime – glycerine, cotton linters, and soybeans – and continued using those substances in subsequent products.
In other situations, it’s a matter of barreling ahead with existing projects. A key example is Tide, a primary P&G brand. Its tenacious inventor worked on the synthetic detergent as a side hustle alongside his wartime duties on the chemistry team, justifying the experimentation because of the change in how laundry was done.
In fact, as the war forced P&G to cope with raw-material shortages, then to convert to supplying the military, then again to reformulate the company’s soap products in response to wartime rationing, David “Dick” Byerly – repeatedly described as “cantankerous” – was told to put his project on hold. Byerly was insistent, though. According to Rising Tide:
After a few months, though, Halberstadt began pestering Coith for permission to “start up just doing a little of this.” Eventually, Coith relented. Byerly could continue as long as the project did not interfere with anything else he was doing, though Coith did suggest that, again, Byerly keep his detergent work out of his weekly reports.
As the Rising Tide authors write, “The breakthrough grew out of a seemingly dead project—a line of research nearly everybody had given up on. Procter & Gamble did not march so much as lurch and crawl its way toward the breakthrough.”
Eventually, obviously, Byerly succeeded. Traditional soaps, including the brands that P&G already sold, did not work well in hard water. In an automatic washer, soap leaves a residue on clothes. Tide’s chemical formulation synthesized surfactants, which addressed that technical challenge.
That chemical innovation gave the company a unique advantage once everyone returned home. It was years before any competitor caught up with the chemical advances that made Tide possible – and by then, P&G had captured a new market, and a billion dollar brand was born. “In the flush of postwar economic growth and consumer affluence, many households bought new appliances, including innovative, new top-loading agitator washers. With Tide coming onto the market at precisely the same time, P&G managed to fuse the two innovations in the popular imagination,” wrote the authors.
The bottom line: While P&G had to deal with the ongoing emergency, it also didn’t stop work on its mainline business, says Shane Meeker, P&G’s corporate storyteller and company historian. When the crisis was over, the company was positioned to step back into the consumer marketplace.
Be ready to retool
Even before World War II began, P&G used its manufacturing facilities and engineering expertise to expand beyond consumer goods, says Meeker.
One advantage was in professional networking. As a large manufacturer with industry connections, P&G leadership knew people in the U.S. government. For example, says Meeker, the story goes that government officials came to P&G’s then-CEO Richard R. Dupree and said, “You’re good at loading powders fast and with high quality. We need you to load a different kind of powder.” The same work processes and manufacturing facilities that could package soap powder could also load explosive powder. That caused the company to set up a separate division, the Procter & Gamble Defense Corporation, which built and operated a shell-loading plant in Milan, Tennessee before 1941; after Pearl Harbor, it stepped up production and expanded to other manufacturing facilities.
The key takeaway: The company could rely on its existing knowledge and facilities as it pivoted to new challenges. And where appropriate, P&G could use existing factories to build different things or to diversify product lines. In Boston, for example, the Gillette facility built parts for aircraft engines in addition to razors. (Razors actually became an important part of soldiers’ toolkits, because they needed a clean shave for a gas mask to fit properly… just as is the case today for COVID-19 masks.)
The result was that the company essentially gained new markets as it responded to changing consumer needs. Some product lines continued – or expanded. In addition to selling soap to homemakers, for instance, P&G’s soap found its way into every soldier’s kit, and well beyond.
“Tons of our soaps went to North Africa with the first American troops,” crowed a 1943 wartime document, “Vital for Victory: Proctor & Gamble on Three Fronts.”
“P and G White Laundry Soap was one of the first soaps put on the shelves of the Marines’ Commissary on Guadalcanal. P and G also does Army washes in India and New Caledonia. Hundreds of pounds of our soaps go into the storage holds of American submarines prowling the Pacific. The American Red Cross uses tons for its foreign bases. Even prisoners’ kits include a cake of our soap.”
The supply chain changed, too, and P&G had to manage shortages and slow delivery. Some of its own supplies were rerouted because of increased demand. Glycerine was needed to make soap – but it’s also a key ingredient of dynamite. The war effort used a lot of dynamite, for everything from land mines to road demolition.
Changing how we work
Today, everyone is trying to adapt to a workforce that needs to work remotely. But during WW II, with 3,600 of its 26,000 employees serving in the armed services, P&G had to rethink how its workforce had to change.
This was, after all, the era of Rosie the Riveter. By 1943 more than 310,000 women worked in the U.S. aircraft industry, accounting for 65% of the industry’s total workforce (compared to just 1% in the pre-war years). With so many of its workers overseas, P&G’s own staffing reflected those changes.
Beyond women entering the workforce, the business changes reflected a world that already was in transition. Synthetics, rubber, and plastics already existed – but the war inspired more innovation in these fields, and just as today, accelerated adoption. “Key to the successful development of plywood aircraft was the discovery of a steel-strong bonding agent produced from soybeans. Today this soybean ‘glue’ welds together hundreds of all-wood training and fighting planes,” announced the Vital for Victory document.
Similarly, automatic washing machines’ adoption wasn’t caused by the war, but in the post-war era, they became far more popular, as returning servicemen settled in newly-created suburbs. Public policy, like the so-called GI Bill of Rights passed in 1944, provided money for veterans to attend college, to purchase homes, and to buy farms; they began forming families and having children in unprecedented numbers. P&G’s consumer products, such as Tide, rode high on the postwar boom, Meeker points out.
In both cases, compare those fast-forward technology and societal changes to our present-day shift to online applications and food delivery services that, only a few months ago, were considered “only for techies,” such as Postmates and Instacart.
The lessons are not only about manufacturing and supply chain adjustments. Today’s crisis management experts are exhorting the need for authority figures to contain and interpret what’s happening in times of uncertainty.
P&G leaders understood this lesson clearly during World War II. As the Vital for Victory document concluded:
Yes, it’s a busy schedule for everyone these days. President Deupree was speaking for every employee when he wrote, “Whatever is right to do in order to make sure that we win this War, we are willing to do.” Victory’s a hard goal to win. But it’s everybody’s job on all three fronts and Procter & Gamble people are determined to do their share—and are doing it every day at work and at home.
World War II changed everything – for the company, for its employees, and for the world at large. But by holding fast and looking for opportunities, society and business emerged into a new and healthy economy. As we face today’s challenges, it’s wise to remember what we’ve been through before, and together, what we can get through again.