World Famous Comics: The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation
The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation
By: A.G. Lafley, Ram Charan Publisher: Crown Business Average Rating: Binding: Hardcover Label: Crown Business Number of Items: 1 Number of Pages: 352 Publication Date: April 08, 2008 Release Date: April 08, 2008
Product Description: How you can increase and sustain organic revenue and profit growth . . . whether you’re running an entire company or in your first management job.
Over the past seven years, Procter & Gamble has tripled profits; significantly improved organic revenue growth, cash flow, and operating margins; and averaged earnings per share growth of 12 percent. How? A. G. Lafley and his leadership team have integrated innovation into everything P&G does and created new customers and new markets.
Through eye-opening stories A. G. Lafley and Ram Charan show how P&G and companies such as Honeywell, Nokia, LEGO, GE, HP, and DuPont have become game-changers. Their inspiring lessons can help you learn how to:
• Make consumers and customers the boss, not the CEO or the management team • Innovate to grow a mature business • Develop higher growth, higher margin businesses • Create new customers and new markets • Revitalize a business model • Reach outside your own business and tap into the abundant brainpower and creativity of the world • Integrate innovation into the mainstream of your managerial decision making • Manage risk • Become a leader of innovation
We live in a world of unprecedented change, increasing global competitiveness, and the very real threat of commoditization. Innovation in this world is the best way to win—arguably the only way to really win. Innovation is not a separate, discrete activity but the job of everyone in a leadership position and the integral, central driving force for any business that wants to grow organically and succeed on a sustained basis.
This is a game-changing book that helps you redefine your leadership and improve your management game.
Best Business Book Ever Having started, built, and sold my first business to McGraw-Hill and written four business books since, I know a first class business book when I see one.
"The Game Changer" is beyond fist class. It is in a space of its own. The prose is clean and deceptively clear. You risk reading it too quickly. This book is like Kissinger's "Diplomacy": every paragraph is a meal. Two to five pages a day is plenty. I tell Japanese CEOs, "Don't wait for the translation and don't worry if you find English difficult; the less you read at a time, the better."
What makes "The Game Changer" so good is that it is written by business people for business people. There is nothing theoretical. No business-school speak.
What the book does not say is that when Lafley took over as CEO of Procter and Gamble, its R&D coverage was 2.6. It is now 7.3. Check out how many manage this. Dell gets 4.9. Apple, 5.6.
There are one or two funky bits of phrasing. "Choiceful Strategies" isn't English. And nothing can be "geared around" a technology platform. Nor can anyone be "innovated out" of a market. A better copy editor would have come down hard.
But don't let a few bits of fuzzy English get in the way of a gem.
It Can Be Done!
I started my career at P&G in brand management. And while the learning was extraordinary, I always felt the company was old, bureaucratic and stodgy. I had the opportunity to work with A.G. Lafley quite a bit in my first assignment, as we were both in laundry brands. He always seemed to me outside the traditional Procter mold--wicked smart but a thoughtful, open-minded and really nice guy.
Fast forward 25 years and what A.G. has done as CEO is incredible. Procter is one battleship that I didn't think could turn, much less on a dime. But reading Game-Changer one begins to appreciate what leadership and commitment can do, even in the largest and most traditional organizations.
Game-Changer is an enlightening read. Lafley and legendary author, consultant and scholar Ram Charan often tag-team the writing, each bringing a unique point of view. Sometimes this gets awkward, as the P&G story is interrupted by examples from other companies (which skew a bit from India, making a noticeably unusual sample). But that's relatively minor criticism compared to the richness of the transformation story at Procter, which has become a leader in commitment to innovation and has reaped significant financial rewards as a result.
The beauty of Game-Changer is that, unlike many business books, it is relevant to both mid-sized companies and corporate giants. For the Fortune 500, P&G's experience is a powerful example that radical and dynamic change is possible (see also GE, Whirlpool and IBM). For smaller companies, change is a lot easier, and the P&G model is full of ideas for potential initiatives.
This is a quick and easy read that never comes across as arrogant or self-serving. It does present itself as an arresting example of a new era in corporate management. I would have never guessed that would have come from Procter & Gamble. In fact, here's the thing. P&G has had a legendary track record over its 170-year history. But frankly, it was never considered a great place to work, at least for the brand management folks. Even more impressive than the reignited financials, the company's commitment to innovation and change make it sound like a really terrific place for a smart marketer to ply his/her trade. Now that's an innovation that will pay long-term dividends. Bill Aho, www.atclevel.typepad.com
Innovative Innovation Ideas and Process In the early years of business on the web, I was on a panel that addressed marketing in the then mostly new Digital Age. There was a senior executive from Proctor and Gamble on that panel who told the assembled marketers that P & G wasn't going to change because "we've got it all figured out."
As we were packing up, one of the other panelists said, "I don't know about you guys but I'm going home and sell my P & G stock. Any company with an executive that high up who thinks they've got it all figured out is going to go down sooner or later."
I remembered that incident while reading Game-Changer: How you can drive revenue and profit growth with innovation by A. G. Lafley and Ram Charan.
Lafley is the Chairman and CEO of Proctor and Gamble. Charan is neck-and-neck in the race with Warren Bennis for "Most Books Co-Authored by a Guru." Each writes parts of the book in his own voice. They are very different voices.
Lafley's voice is practical and down to earth. Here's a quote from chapter 1. "The Game-Changer is about what I have learned over the course of a lifetime in business, but particularly since I became CEO of P & G."
Charan has a more buzzword-rich style. "P & G is one of the few companies that has been able to break the chains of commoditization and create organic growth on a sustainable basis through implementing and managing the integrated process of innovation."
This is a book about the turnaround at P & G. Since Lafley took over, in June of 2000, the company has tripled profits, and improved revenue growth, cash flow, and operating margins. The stock price has more than doubled.
A significant part of the turnaround was the development of a process for managing innovation at P & G. This book is about that process and how it works.
Those are both Lafley's stories. But this is a better book because Ram Charan adds commentary and examples from other firms.
If you want to learn the back story, chapter one will set the stage for you. After Charan's comments in chapter two, Game-Changer is organized into three parts.
Drawing the Big Picture sets the stage for the other parts. The chapter titled The Customer is Boss is one of those chapters you copy so you can re-read it often.
Every company says they are customer-focused. P & G has been known as a customer-focused company for most of its history. And yet it was easy for the customer to slide from the center of the business to periphery.
Chapter three is the best explanation I've seen of what it means to put the customer at the center of your company. I'd love to see P & G or the publisher put this chapter out as a pamphlet.
Part Two is about the innovation process itself. It begins with a chapter on organizing for innovation. This chapter is one of several that include excellent material on innovation at other companies.
If you're not at a consumer products company, you'll get ideas about how innovation looks in other industries. If you don't think a P & G practice will work at your company, the book gives you some other models.
The next chapter, on integrating innovation into your routine, is one of the best in the book because it concentrates on a key point. For innovation to be a real game-changer, it can't be bolted on to day-to-day operations and responsibilities. It has to be part of the routine, even as it challenges the routine. There's great material here on how ideas get killed and the importance of a regular, social mechanism for approving ideas.
After a chapter on the risks of innovation, the authors move to the final part of the book which discusses the culture of innovation. You'll learn how innovation is a team sport and how a leader's job should include innovation.
This is an idea book, not a how-to book. If you want an innovation manual, pass this book by.
But if you want lots of ideas and examples to hold up against the way you do business now, plunk down your money. Even if you only read the chapter on putting the customer at the center, you'll get lots of return on your investment in this book.
Remember who your real BOSS is In the early 1990's P&G was the number two laundry company in the world with a 19 per cent share. Today, it has a 34 share - nearly double its next competitor. Not bad, not bad at all. This book will help you understand how this consumer behemoth was able to achieve this result and many others.
I will be very surprised if THE GAMECHANGER does not become required reading in many Fortune 500 executive suites. It is not because there is anything dramatically new in it, but because it provides a good look at how Proctor & Gamble turned itself around from being a slow moving organization, poorly rated by analysts to one of the most respected consumer goods companies on the planet.
Credit for much of this turnaround goes to Chairman and CEO A.G. Lafley who took office in June 2000.
The co-authors, Lafley and Charan are corporate superstars. Lafley's contributions to the book are particularly interesting as he provides some excellent case study material on how innovation drove growth for key P&G brands.
The most consistently captivating theme is the reference to "The Boss." No, not Bruce Springsteen, good and all as he is. The Boss is the consumer and if Lafley is to be believed, Proctor & Gamble spends its life trying to satisfy the Boss. I particularly like his phrase of placing a "laser-sharp focus on consumers."
The authors tell us that Innovation is an integrated management process with the customer absolutely at the center. Eight drivers work together to fuel profitable, customer oriented growth. These are Motivating Purpose and Values Stretching Goals Choiceful Strategies Unique Core Strengths Enabling Structures Consistent and Reliable systems Courageous and Connected Culture Inspiring Leadership
These eight drivers have fueled P&G's growth as the company focused on two "moments of truth," (Interestingly, no acknowledgement to former SAS CEO Jan Carlzon whom I thought was responsible for popularizing this concept in a book of the same name). These are at time of purchase and time of usage.
Appropriately, as one of the most global of companies, P&G examples come from many different countries and product categories. Immersive in-store and in-home research has gained in popularity at the expense of the standard focus group. This deep dive research allowed P&G to dramatically grow share for Downy Single Rinse (fabric softener) in Mexico, Hugo Boss fragrances and SK-II skin care brand in Japan. I write about the Toyota concept of Genchi Genbutsu (Go to the source and learn) in my book Why Ireland Never Invaded America
One of the underlying themes throughout the book is that Innovation is cultural. You either live it or you don't. P&G's commitment to innovation has even seen it create a joint venture with a major competitior - Clorox. The two got together to create improved product performance for the Glad brand of household bags.
This book is not just about P&G. Other companies referenced in some detail include Nokia, Marico India, Best Buy, Lego, Honeywell and HP. Charan devotes a full chapter to "How Jeff Immelt made Innovation a way of life at GE." Given GE's ongoing struggles, the most apt sentence in this chapter is "It has taken time for GE's people and investors to be convinced." Ya think! Maybe the key lesson in this chapter is Innovation is not easy, no matter what your financial and commercial muscle is.
Overall, a very good read. Whether it will change your company and business depends on you and how aggressively you buy into the cultural aspects of creating an innovative company.
Some Good Points The best way to win in the world is through innovation. However, you can't wait for a light bulb to go off in some-one's head - it has to be central to goals, strategy, structure, systems, etc. of your business. "The Game Change" is P&G's experience down this path, as well as short vignettes from other firms within Ram Charan's experience.
Lafely began by establishing a goal that half of new product and technology innovations come from outside P&G (broaden its source of ideas, and break down the "not invented here" problem). He further focused on organic (not acquired) growth - less risky. Within that Lafley focused on current consumers, retailers, wholesalers, and distributors. Major issues were zeroed in on - missed cases, and improved pricing (lower). Realistic stretch goals were set (eg. growing 2X the rate of the market or GDP), and the firm exited areas without a long-term competitive advantage for P&G (eg. food and beverage).
Improved market research was probably "the" game-changer. P&G went from focus-groups to immersion - eg. working at a store, living within a target group family, building an intense focus on the customer.
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