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A.G. Lafley's 'Game Changer' -- Eight Rules of Innovation That Work

Procter & Gamble CEO A.G. Lafley has been a huge success in his eight years at the helm of the consumer goods giant, having revived a sagging company. Now he offers some important lessons from the experience in his new book, "The Game-Changer, How You Can Drive Revenue and Profit Growth With Innovation" (Crown Business, 336 pages) , co-written with business consultant Ram Charan. In brief:

  1. Motive purpose and ideas: People work better when turned on.
  2. Stretch goals: Pushing is important but don't overdo as P&G did in 2000.
  3. "Choiceful" strategies: Innovation helps you choose when to launch new products or drop old ones.
  4. Unique core strengths: Utilize what you have always done well.
  5. Enabling structures: The firm's structure make-up must endorse innovation.
  6. Consistent and reliable systems: You need a check for the chaos.
  7. Courageous and connected culture: Don't punish innovators.
  8. Inspiring leadership: The best energize and inspire workers while being honest.
These are very sound ideas and helped Lafley vastly improve P&G's corporate culture and revive its innovative DNA. He inherited the mess left by Durk Jager who had been CEO and Chairman for less than two years. Jager's mission was to completely reorganize P&G and double revenues to $70 billion by breaking up a country-based organization system and replacing it with one based on product lines. In the resulting chaos, Jager's hard-charging personality poisoned the well of innovation at a company that had invented brand management.

Full disclosure: I covered P&G as a business journalist a decade ago when Jager and his predecessor, gentlemanly John Pepper, were in charge. It was a love-hate thing. I admired the company's innovation but hated its militaristic, secretive ways. Give me the Kremlin any day.

I may have been a decade too soon since I hear that Lafley's really changed things. Good for him. His book has plenty of useful insights although it does read at times like a PowerPoint presentation. It's worth a look on a long airplane ride. Let me know what you think.

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