The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation

277 Pages·2008·2.04 MB·English

by  A.G. Lafley

A. G. LAFLEY is the chairman and CEO of Procter & Gamble, which is
consistently recognized as one of the most admired companies in the world and a
great developer of business leaders. A. G. was named CEO of the year in 2006
by Chief Executive magazine and serves on the boards of GE and Dell. His first
opportunity to manage a business came when he was in the Navy and in charge
of retail and services businesses for ten thousand Navy and Marine Corps people
and their families. After the Navy he went to Harvard Business School, and then
joined P&G following graduation. He started as a brand assistant for Joy in 1977
and was appointed CEO in June 2000.
RAM CHARAN is co-author of the bestseller Execution and the author of many
other books. Dr Charan grew up in India, where he first learned the art and
science of business in his family’s shoe shop. After earning his MBA and DBA
from Harvard Business School, he taught for a number of years at Harvard and
Northwestern. He now advises the leaders and boards of companies around the
world, including GE, DuPont, Nokia, Verizon and The Thomson Corporation.
He is admired around the world for his practicality and for the value he provides
in helping to solve business problems. For more information on Ram Charan and
his work, visit www.ramcharan.com.
Also by Ram Charan: Leaders at All Levels, What the Customer Wants You to
Know, Know-How, Profitable Growth Is Everyone’s Business, What the CEO
Wants You to Know, Boards at Work, Boards that Deliver.
Co-authored by Ram Charan: Execution, Confronting Reality, Every Business Is
a Growth Business, The Leadership Pipeline, E-Board Strategies, Strategic
Management: A Casebook in Policy and Planning.
Praise for A. G. Lafley
‘A. G. Lafley has re-energized a venerable giant with a style and energy that
will be the subject of business school cases for years to come.’ Chief Executive
magazine
‘Lafley brought a whole lot of creativity and rigour to P&G’s innovation
process.’ Fortune magazine
‘The proof of Lafley’s approach is plain enough P&G has not only doubled the
number of new products but also more than doubled its portfolio of billion-
dollar brands and its stock price.’ U.S. News & World Report
‘Of all the firms on the 2007 ranking of the “World’s Most Innovative
Companies”, few are more closely associated with today’s innovation zeitgeist
than Procter & Gamble now famous for its open approach to innovation.’
Business Week
Praise for Ram Charan ‘Ram has this rare ability to distil meaningful from
meaningless.’ Jack Welch
‘Among the world’s most sought after CEO advisers.’ BusinessWeek
‘Ram Charan is my “secret weapon” constantly providing depth to issues, not
just answers.’ Ivan Seidenberg, chairman and CEO of Verizon Communications
‘Ram Charan knows more about corporate America than anyone.’ Dick
Harrington, CEO of The Thomson Corporation
THE
GAME-
CHANGER
How Every Leader Can Drive Everyday
Innovation
A. G. LAFLEY & RAM CHARAN
First published in Great Britain in 2008 by PROFILE BOOKS LTD
3A Exmouth House
Pine Street
London EC1R 0JH
www.profilebooks.com
Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of
Random House, Inc., New York
Copyright © Ram Charan and A. G. Lafley, 2008
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Printed and bound in Great Britain by Clays, Bungay, Suffolk
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Dedicated to the hearts and souls of the joint family of twelve siblings and
cousins living under one roof for fifty years whose personal sacrifices made my
formal education possible.
—Ram Charan
Dedicated to Gil Cloyd—my innovation partner at Procter & Gamble.
In the early days of 2000, we stood alone. We knew we needed to change—
both the business and the R&D leadership approach, and the culture of the
Company and R&D—but we didn’t know exactly how, or even at first where to
begin.
We knew we had to open the Company up to make the Company a lot more
externally focused and to encourage a lot more collaboration and cooperation
internally across business units, geographic regions, and functions.
It was very lonely, but we stood together.
Gil has been a real change agent and a consummate innovation leader. He
preserved the essential part of P&G R&D—world-class technologists who are
masters of core technologies critical to P&G’s household and personal-care
businesses—but was willing to change virtually everything else.
Gil is my innovation partner and, together with fellow innovation leaders in
the businesses and functions across P&G, we are trying to unleash the power of
the consumer and a host of external innovation partners to create brands and
products that touch more consumers’ lives and improve each day of their lives.
It hasn’t been easy, and we still have a lot to do. But, every step of the way, it
has been a privilege and a pleasure to work with Gil.
—A. G. Lafley
GAME-CHANGER
A Definition
GAME-CHANGER (gām chang´er) 1. a visionary
strategist who alters the game his business plays or
conceives an entirely new game. 2. a creator who uses
innovation as the basis for sustaining profitable organic
growth and consistently improving margins. 3. a leader
who understands that the consumer or customer—not the
CEO—is boss. 4. a catalyst who uses innovation to drive
every element of a business from strategy to organization,
and from budgeting and resource allocation to selecting,
rewarding, and promoting people. 5. an integrator who
sees innovation as an integrated end-to-end process, not a
series of discrete steps. 6. a breaker of the chains of
commoditization who creates differentiated and value-
added brands and businesses through innovation. 7. a
hardheaded humanist who sees innovation as a social
process and understands that human interaction— how
people talk and work together—is the key to innovation,
not just technology.
CONTENTS
GAME-CHANGER:
A Definition
Our Goal
ONE:
How and Why Innovation at Procter & Gamble
Changed Its Game
TWO:
What P&G’s Innovation Transformation Means for
You
PART ONE: DRAWING THE BIG PICTURE
THREE:
The Customer Is Boss:
The Foundation of Successful Innovation
FOUR:
Where to Play, How to Win:
How Goals and Strategies Achieve Game-Changing
Innovation
FIVE:
Leveraging What You Do Best:
Revitalizing Core Strengths with Innovation
PART TWO: MAKING INNOVATION HAPPEN
SIX:
Organizing for Innovation:
Building Enabling Structures
SEVEN:
Integrating Innovation into Your Routine:
From Generating Ideas to Go to Market
EIGHT:
Managing the Risks of Innovation
PART THREE: THE CULTURE OF INNOVATION
NINE:
Innovation Is a Team Sport:
Courageous and Connected Culture
TEN:
The New Job of the Leader:
Innovation and Growth
CONCLUSION:
How Jeff Immelt Made Innovation a Way of Life at
GE
AFTERWORD
ACKNOWLEDGMENTS