A.G. Lafley, CEO of Procter & Gamble, the keynote speaker at the FedEx Institute of Technology’s Innovation Expo, shared a wealth of insights on leadership and strategy from his experience and his collaboration with Peter Drucker. However, his most impactful message was so simple, many in the audience may have missed it – strategy is about making choices. That’s all there is to it. Make decisions about what business you are in, how you win in this business and then stick to them.
We’ve found that making definitive choices is difficult for many businesses. They prefer to keep their options open and not limit themselves to a particular market, customer or value proposition. This is largely fear based; the fear of change, the fear of being wrong, and the fear of losing it all. Sometimes there is too much noise, too many things to consider and leaders become paralyzed because the path forward isn’t clear. Not making committed decisions about the strategy is far worse for the health of the business. The world is dynamic, it’s changing and yet the company is static.
Lafley attributes much of his success at P&G to the choices he has made. Many of these choices were not popular, like when he sold Jif peanut butter, a profitable business unit. It’s certainly not easy to let go of a cash flowing legacy business. Especially with incoming calls from past leaders and board members questioning this decision. Lafley was able to triple the company’s market cap by making the decision to grow P&G’s core, extend into beauty and personal care, and expand into emerging markets. Peanut butter was no longer a strategic fit.
He will tell you that the purpose of strategy is to win. Lots of companies are playing without the intent to win. Just being on the field isn’t good enough. To win you must clearly define winning. Winning companies have a unique position in their industry, a sustainable advantage and deliver a superior value versus the competition.
Lafley points out in his book that a potentially winning strategy shortens your odds, it does not guarantee success. Nothing in life is certain. This brings us back to risk and Philip Mudd from the CIA, the subject of last week’s column. Do the analysis to minimize risk and give yourself a decision advantage. Then make the decision.
People think that innovation is about wildly creative ideas that break the mold – and it is to a certain extent. But it really is just solid execution within smart strategy. Lafley is well known for turning P&G into an organization that innovates quickly to delight its customers. How did he do this? With discipline, fortitude and action. He’s laser focused on where to play and how to win.
Jocelyn Atkinson and Michael Graber run the Southern Growth Studio, a strategic growth firm based in Memphis. Visit www.southerngrowthstudio.com to learn more.