Lafley’s Leadership lessons
Last week I posted on the impact a Brand CEO can have on a business, using P&G, Unilever and Starbucks as examples. Here, I look at some of the possible leadership lessons from AJ Lafley, who has just returned to P&G as CEO.
Again and again focus comes out as a key role for leaders to play. One example of this focus is the bold move to divest of $7billion+ of food and beverage brands. And these weren't crappy little brands. The list included Folgers, the number 1 US brand of coffee, and Pringles. But as Lafley commented here,
"We chose for good strategic reasons to abandon and get out of those businesses so we could invest our people but also our cash in businesses like home care, personal care, beauty care and health care, all of which looked strategically more attractive."
Focus from the top is one thing. But the power of P&G is to then to organise around the focus areas and ruthlessly prioritise. From an interveiw with Bloomberg here gives his four key questions to ask, to drive focus into the business.
1. where am I going to play to win?
2. how am I going to win where I play?
3. where are my core competencies that are going to enable me to win where I play?
4. what management systems and measures are going to help me execute my strategies?
When I started my career at P&G all the above were crystal clear. Also, I understood them quickly with no need for training as they were so visible and tangible in the day-to-day workings of the business.
3. CONSUMER IMMERSION
Every company echoes the Lafley's mantra that “The customer is the boss.” But few companies live this out be immersing themselves into the consumer world. Quoting again from Mark Ritson's article, you see how Lafley spends real time out face-to-face with consumers in their real lives:
The Wall Street Journal once got permission to shadow him on a trip to South America but was surprised to find him not in P&G’s local offices but spending the morning in a small kitchen of a young mother from Caracas as she explained which beauty products she used. Imagine the CEO of one of the world’s biggest companies spending 20 days a year in the bathrooms and kitchens of the customers that pay for his and everyone else’s salaries.
4. OPEN INNOVATION
During Lafley's first period in charge, P&G instigated a program called "Connect & Develop". The idea was to open up the business to multiple sources of innovation. This addressed head on a criticism of P&G about the company being too closed and internally focused. Back in 2001 less than 10% of new initiatives involved external innovation partnerships. The ambitious goal of 50% by 2008 was surpassed. This approach played a key role in helping develop the Olay Regenerist line, for example.
In conclusion, the leadership lessons of AG Lafley aint rocket science. But they are super hard to practice from the top to the bottom of the organisation.
See AG on video here, talking about his