Lafley Alan G. - What would Drucker do now : solutions to todays toughest challenges from the father of modern management

Solutions to Todays
Toughest Challenges from the
Father of Modern Management

RICK WARTZMAN

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For Randye, because I love you madly

And for Mom and Dad,
whose strong sense of values infuses these pages

I grew up with Peter Drucker. My father spent 25 years in human resources management at General Electric and another decade leading HR at Chase Manhattan Bank. He met Peter at GEs Crotonville training center in the 1950s and always had Peters books in his study at home. When I was in college, I would occasionally flip through classics like The Effective Executive and The Practice of Management.

But I didnt get serious about Drucker until I was in my mid-20s and responsible for the Navy Exchange Service and retail operations at the U.S. air base in Atsugi, Japan. This was my first real business job, and I needed a business education fast. Drucker was it.

Almost 30 years laterafter the navy, Harvard Business School, and more than 22 years as a manager at Procter & GambleI took the initiative to meet Peter personally. It was 1999, and I had just returned from a five-year stint running P&G Asia. The company was in the midst of what was arguably the most ambitious strategic and organizational transformation in its then 162-year history.

I was responsible for P&Gs North America region, the companys home market, and for creating a new global beauty and personal care business. I called Peter and asked if he would see me. A week later, I found myself sitting in his modest Claremont, Calif., home talking about a world he had thought about for 60 years (and I had worked in for 25).

I had hoped for an hour of his time. We chatted for four. For every question I posed, Peter had two or three more to consider. That exhilarating first exchange provided the themes that he and I would return to again and again over the next six years: the customer, innovation, strategy, and leadership.

A flood of memories from those conversations came back to me as I read this collection of columns by Rick Wartzman. Rick hits on many of the same subjects that Peter and I discussed, and he brings these principles to life by applying them to current topics. Each column is like a mini-case study, written in a style that, like Peters own, is pragmatic and accessible (and simply fun to read).

As I spent more time with Peter, we ultimately took up a topic that he turned to in the last years of his life: the unique work of the CEO. His final column for The Wall Street Journal, which ran in December 2004, about a year before he died, explored this subject. My May 2009 Harvard Business Review article, What Only the CEO Can Do, combined Peters thinking with my actual experience in that job at P&G in the first decade of the twenty-first century.

As CEO, I was a shameless disciple of Peter Drucker. He said, The purpose of a business is to create and serve a customer. Plain and simple. At P&G, the consumer was boss, and consumer-driven strategy, brands, and innovation drove our business and financial growth. We focused on delighting current customers and attracting new ones by providing offerings that better met their wants and needs. We understood that the smartest way to conduct consumer research is to actually experience what the customer does. Thats why, whenever I traveled, I personally went into the homes of our customers. It was essential to understand how these peoplemostly womenused our brands and products. I also shopped with them, so I could experience how they made their purchase choices.

Peter insisted on the practice of management. He had little patience for detached theory or abstract plans. Plans are only good intentions unless they degenerate into hard work, he liked to say. I focused on the few strategic choices that would give P&G sustainable advantage. I also focused on consistent, excellent execution, because I knew that the only strategy our customers (and even competitors) would ever see was what we executed in the store and in the home every day.

Peter also insisted on leaders taking responsibility: Management is doing things right; leadership is doing the right things. As P&G CEO, I knew we needed consistently good everyday management. But we also needed leaders. Leaders were the difference maker in our company, and leadership was a core value expected of every P&Ger.