It has been announced that A.G. Lafley will be retiring as CEO of Procter & Gamble, remaining Chairman of the organization. After we reviewed a book last year called The Game-Changer, written by A.G. Lafley and Ram Charan, his co-author, it might be the right moment to revisit his ideas that constitute his legacy. The book detailed the open innovation system that Lafley had pioneered at P&G over the past half a dozen years that has become known as Connect and Develop. What stood out about The Game-Changer was its lack of feel for the soft side of bringing about change. There were none of the usual human factor stories, the anecdotes about ordinary employees making the big time, in fact there was little feel for people in the book. This was strange because we had met Lafley at an IESE and WSJ breakfast session and he was very much a people person. The book was a long way from his personal style. He came across as a warm, open person with a real passion for P&G, its products and its customers. His presentation was inspiring to listen to and watch; it gave his audience lots of ideas that day about what could and should be done.
There might be an argument for the fact that the human factor had been missing from the book. Lafley has been successful at P&G and rightly takes some pride in pulling the company through some hard times. He did so through cost cutting and shrewd acquisition – Gillette for one increased revenues by a substantial 27%. Areas such as product and brand management and supply chain management were honed to perfection. The story of the growth of the fine fragrance market is one of astute acquisitions positioned to take advantage of the P&G brand architecture. We admire Lafley’s successes with P&G, but we also keep coming back to the missing human factor. Indeed, the authors of The Game-Changer may have gotten feedback that the human factor was missing from the book, so they tried to remedy that “shortcoming” in an article called “P&G’s Innovation Culture,” featured in strategy+business. But Lafley and Charan miss it again.
The book broke new ground in the secret to creative culture – its strength lay in the analysis and understanding of processes, driven through an organisation with training and discipline that made innovation work in a business. It is very much the P&G way and it worked for them. It ensured stability because behaviours necessary for improvisation were not inherently present in the organisation. These normally get filtered out of organisations to ensure predictability so that learning skills necessary for agility and flexibility suffer and disappear. But since when have flexibility and agility been “soft skills”? P&G made them extremely hard skills embedded in parts of the culture. Lafley needed the organisation to reshape itself around opportunities in customer needs, adjacent business and new technologies – nothing soft about that. If you watch Liverpool Football club you see that seldom do goals come out of set pieces. Rather they have players like Fernando Torres who has the ability to turn a breakdown on the part of opponents into an attacking opportunity. Out of broken play the team looks to restructure itself and build an attacking flow and movement. Does this evolve from Goleman’s emotional intelligence of empathy and self-awareness as Lafley and Charan suggest, maybe, but we would disagree. We like to think Lafley was tough on this and that his managers responded accordingly.
In a way they give the game away in the article when they talk about the hard line middle managers who had not taken the Kool-Aid. Those managers are about cost cutting and productivity. They see innovation not in brilliant insights but through processes. All of that commendable, and if half of our companies could do anything similar they would be proud of themselves, but let’s not be carried away by thinking that this is a truly human factors approach.
 The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation, by A.G. Lafley and Ram Charan, Crown Business Books, April 2008.
 “P&G’s Innovation Culture,” by A.G. Lafley, with an introduction by Ram Charan, strategy + business, issue 52, Autumn 2008.