Case #27 Proctor & Gamble from text. ch 12 (CH 3, 4, 5, 10, 11)
Assess LafleyAc€?cs and McDonaldAc€?cs leadership of Procter and Gamble. What steps were taken to make P&G a learning organization?
CEO A.G. Lafley believes that innovation is key to success of these brands, and that design, not simply price or technology should be P&GAc€?cs key differentiator; and that a productAc€?cs value, not its price is what people look for. What could Lafley do to implement his ideas?
The Ac€A?connect and developAc€?? model for innovation, unlike the traditional internal R&D, looks to external sources for innovation. The article explains that P&G changed its focus in 2000, and the company, and its stock, has grown steadily since then. Do you believe Lafley was correct that P&G couldnAc€?ct grow without changing how it handled innovation?
Regarding LafleyAc€?cs approach to the culture change at P&G, in the 2007 video (4 minutes long) Ac€A?Judgment CallAc€??, Lafley describes a management decision he made unilaterally. Lafley skipped over 78 general managers with more seniority in making a key staff appointment, a woman, without even consulting the rest of his management team. Lafley says Ac€A?there was almost a revoltAc€?? over his decision. Read the analysis on the next page, or watch the Ac€A?analysisAc€?? on the video following LafleyAc€?cs interview, where Noel Tichy explains LafleyAc€?cs decision process: http://www.businessweek.com//careers/content/sep2007/ca20070912_634527.htm. What lessons can you learn about leadership from this interview and the videos?
2. What were the major organizational changes Lafley made at P&G, and what challenges still remain?
3. What intangible resources did P&G have that Lafley and McDonald used to enact their change strategies? What competitive strategy did these resources best support?