A.G. Lafley - The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation
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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 winarguably 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.
A.G. Lafley: author's other books
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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 familys 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 Everyones 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&Gs innovation process. Fortune magazine
The proof of Lafleys 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 Worlds Most Innovative Companies, few are more closely associated with todays 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 worlds 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
1 3 5 7 9 10 8 6 4 2
Printed and bound in Great Britain by Clays, Bungay, Suffolk
The moral right of the authors has been asserted.
All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book.
A CIP catalogue record for this book is available from the British Library.
ISBN 978 1 84668 162 2
The paper this book is printed on is certified by the 1996 Forest Stewardship Council A.C. (FSC). It is ancient-forest friendly. The printer holds FSC chain of custody SGS-COC-2061
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 Cloydmy innovation partner at Procter & Gamble.
In the early days of 2000, we stood alone. We knew we needed to changeboth the business and the R&D leadership approach, and the culture of the Company and R&Dbut we didnt 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&Dworld-class technologists who are masters of core technologies critical to P&Gs household and personal-care businessesbut 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 hasnt 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 (gm changer) . a visionary strategist who alters the game his business plays or conceives an entirely new game.. a creator who uses innovation as the basis for sustaining profitable organic growth and consistently improving margins.. a leader who understands that the consumer or customernot the CEOis boss.. 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.. an integrator who sees innovation as an integrated end-to-end process, not a series of discrete steps. a breaker of the chains of commoditization who creates differentiated and value-added brands and businesses through innovation. a hardheaded humanist who sees innovation as a social process and understands that human interaction how people talk and work togetheris the key to innovation, not just technology.
CONTENTS
GAME-CHANGER:
A Definition
Winning is pretty much the same in todays business world as it has been for decades: Create new customers, new products, and new services that drive revenue growth and profits. Whats different is
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