The Remarkable Mr. Lafley

By Michael Lee Stallard, Carolyn Dewing-Hommes and Jason Pankau

There are probably a whole host of factors that contributed to the stunning turnaround of

Procter & Gamble led by A.G. Lafley. We are convinced that Lafley's leadership style is right

up there at the top.

When Durk Jager resigned as CEO of P&G in June of 2000, his tenure had lasted only 17

months, the shortest in the firm's 165-year history. At that time, P&G's stock had declined 50

percent, it had lost $320 million in the most recent quarter, half of its brands were losing

market share and the firm was struggling with morale problems. P&G is known for its

talented brand managers and a quarter of them had left the firm.

Lafley, a low-profile, thoughtful P&G veteran, was tapped to replace Jager.

From the beginning, Lafley's leadership style was a marked contrast to

Jager's. Although Jager had questioned the competence of many P&G

employees, Lafley immediately assured them that he knew they were

capable of restoring the marketing powerhouse to its former greatness. Whereas Jager has

been described as gruff and confrontational, Lafley is relentlessly inquisitive in a calm,

respectful manner that builds trust with employees.

The most striking aspect of Lafley's approach were his actions to improve the flow of

knowledge throughout P&G. Lafley emphasized listening more than lecturing. During his

early days as CEO Lafley insisted on transparency by encouraging everyone to "get the mooses

out of the closets." When meeting with groups of managers he would tell them he didn't

prepare a speech and just wanted to hear about the issues on their minds. A marketer to the

core, Lafley also requested a study of P&G employees to hear their ideas about what needed to

be done. In his desire to learn from others he has even attended meetings of P&G alumni to

hear their views.

At P&G's corporate headquarters, Lafley transformed the 11 th floor where senior executives

maintained plush offices. Art was donated to a museum, oak walls were torn down, and

eleven of the executives were moved to be closer to the people they lead. The remaining

executives,