Friday, August 10, 2012

Strategy - A. G. Lafley Talks About his Run at Procter and Gamble

A. G. Lafley presided over one of the most prolific periods of growth in Procter and Gamble history.  Early last year he made himself available to the students of the McCombs School of Business at the University of Texas in Austin.  What followed was a candid interview that provides perspective on Lafley the man as well as the strategy he believes made success possible.

In the VUCA world we live in good strategy is essential. These are highlights that resonated with me:
  • Build an organization that is AGILE, open and transparent
  • Recognize that change will be constant (companies obliterated, natural disasters, economic uncertainty and social/political conflict)
  • Establish a culture of courage
  • Recognize failures as learning experiences (keep score)
  • Terminate relationships with issues of performance or integrity
  • Constantly infuse management with younger talent
  • Business succeeds where demographics and economies are growing
  • Global markets are key
  • Habits and practices differ but needs and wants are similar around the world
  • Grow from core products, services and market strengths
  • Accelerate in emerging markets

As Lafley says in this interview, there were key elements at work in the organization he took over.  Procter and Gamble was a family owned business that was purpose and values driven. The company's well known role was to make life better.  They enjoyed a high level of trust with their employees, their clients and vendors. Every employee was an owner with a portion of compensation in shares and an eye on long term company performance. This made for a decades long approach to strategy, not a near term objective for the next quarter or next annual report. From this base, Lafley and his colleagues changed acquisition successes from 30- 60% and innovation successes from 10-50% and this turned out to be a primary contributor to growth and profitability.

Please take a moment to reveal what you found as the most influential take-away from this interview.

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