Stories Bring Company Strategies To Life

When A. G. Lafley took over the reins as CEO of Procter & Gamble in 2000, growth had slowed, profits were falling and some wondered aloud if Proctor & Gamble had any future at all.

However, Lafley was not to be daunted and, what he did was nothing less than remarkable. He reinvented innovation at Proctor & Gamble by radically changing the strategy and changing the company’s strategic story.

The previous CEO had spent heavily on traditional research and development and had tripled the innovation spending during his year and a half leading the company. Results were, to say the least, disappointing. Other executives in the company thought P. & G. should focus on marketing and brand building.

A.G. Lafley had different ideas on how to approach innovation and growth in the company.

His new initiative and the new innovation story he started telling was dubbed “Connect & Develop”. At first, angry senior scientists thought he was walking away from innovation which had always been the lifeblood of the company. In fact, what he really wanted to do was to double or triple the productivity of P&G’s research labs. His brilliant insight was to combine small enterprise innovation from outside the company with P. & G.’s research labs and leverage their innovations with the company’s worldwide marketing and distribution muscle.

By creating a new innovation story through the “Connect & Develop” initiative and inspiring his senior innovation executives to embrace this new story, A.G. Lafley not only rethought how R&D is performed at Procter & Gamble but brilliantly returned Procter & Gamble to its long-held position as a successful innovator in the consumer brand space.