The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation
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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. |
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| 08-30-08 | 5 | (NA) |
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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 (Review Data Last Updated: 2008-09-06 03:47:30 EST)
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| 07-12-08 | 4 | (NA) |
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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. (Review Data Last Updated: 2008-09-03 03:30:03 EST)
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| 06-18-08 | 5 | 0\1 |
| Reviewer | Permalink | ||||||||||||||||||||||||
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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. (Review Data Last Updated: 2008-07-13 00:23:10 EST)
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| 06-14-08 | 3 | (NA) |
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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. (Review Data Last Updated: 2008-06-20 00:23:15 EST)
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| 06-10-08 | 4 | (NA) |
| Reviewer | Permalink | ||||||||||||||||||||||||
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The Game Changer is innovation and AG Lafley partners with Ram Charan to describe how P&G has changed the game in consumer products. Lafley is certainly has the credibility to speak as an expert on this subject and he does by discussing the basics of making the enterprise more innovative. Charan lends his considerable breadth of experience and ability to structure these points into a salient business book. Charan plays much the same role as he did with Larry Bossidy in the book Execution. This combination should make for a game changing book. Unfortunately, The Game Changer delivers on about 70 to 80% of these expectations.
The book reinforces rather than reveals new insight into the innovation equation. In many ways it covers existing ground, from the descriptions it looks like P&G concentrated on implementing techniques related to understanding the voice of the customer, value engineering, and the like. All good techniques and well proven, but they are often hard to execute at scale. The book concentrates on the eight pillars of game changing customer centric innovation. The book does a good job of reviewing each pillar and its implications to business in general and at the high level. These pillars are: 1. Motivating purpose and values - using values and mission to inspire people to reach beyond the everyday to the innovation. 2. Stretching goals - carting clarity through goals that focus on strategies that win and align everyone's energy and activities. 3. Choiceful strategies - making the hard choices that require to achieve the clear goals by deciding where you are going to play and then dedicating the resources on the right strategies. 4. Unique core strengths - focusing on how you are going to win based on taking advantage of your strengths. 5. Enabling structures - pointing out the important and necessary reality that innovation at speed and scale requires more than just being innovative. Here Lafley provides a good explanation of the structures involved in P&G's Connect and Develop strategy. 6. Consistent & reliable systems - Discusses the need to move chaotic and disruptive invention into valuable innovation. These systems are not just IT systems but the managerial decisions, financial control and other processes needed to go from idea to value at scale. 7. Courageous & connected culture - recognizes that people are at the heart of innovation. Now that may sound trite, but Lafley provides good insight into how P&G has gone outside of its comfort zone to understand customer and market needs. 8. Inspiring leadership - is a natural because innovation requires doing something new that can come up against the status quo. Here the book falls back on tried and true concepts such as emotional intelligence. It's good to know that such an idea works and the authors are to be commended for not trying to re-invent the wheel. Overall a solid, but not spectacular book as the formula that worked well for Execution has lost some of its luster and appeal on this topic. The Game Changer is aimed at the same executive audience who I am sure is already polishing up their notions of getting close to the customer, be more innovative and the like. Given the proven experience and success of P&G, I had expected this book to be more of a case study and more implementation oriented than it is. The individual product innovation stories are helpful, but difficult to translate outside of consumer products. So, that is the basis for the four out of five stars. Worth the read for reinforcement, but not something I would run out and buy ahead of other books. (Review Data Last Updated: 2008-06-15 00:24:32 EST)
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| 05-18-08 | 4 | (NA) |
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It was exactly a year ago when ex-Procter & Gamble CEO John Pepper's book "What Really Matters" came out. In it Pepper provides an outstanding overview of what makes a company like P&G move forward. Now comes a book by the current P&G CEO and Chairman A.G. Lafley, co-authored with Ram Charan, to discuss the role of innovation in today's business world. (Disclaimer: I live in Cincinnati, but I am not a P&G employee. I do own P&G stock.)
In "The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation" (348 pages), the authors methodically dissect what true innovation is and how it can change a company around. At times this book reads like an MBA course book. For me the best moments of the book are when Lafley discusses the enormous challenges he daced when he became CEO in 2000, taking over for the unpopular and unsuccessful Dirk Jager. Speaking about his first day as CEO: "My instincts pointed me toward two things: firstm the foundation of P&G, its purpose and values; second, the need to reset external expectations about growth goals and the business and financial results we would have to deliver to put P&G's performance back among the leaders in the fast-moving consumer products industry." We all know what an incredible turnaround Lafley has spearheaded and as a P&G shareholder, I am very appreciative of that. Charan notes that "In effect, A.G. Lafley is the Chief Innovation Officer if the company as a whole but he partners very closely with the chief technology officer and with the group presidents who are the CIOs of their respective businesses." If I have a criticism of the book, it is that at times it states the obvious, without contributing further. On the selection and green-lighting of ideas, the book states "There must be a clearly-defined social mechanism for selecting ideas to be green-lighted. The composition and leadership of this social mechanism must be explicitly considered and carefully chosen." Well, yes! As noted before, this is not a book you will read in a couple of hours, but the bottom line is that it is well worth your investment of time. (Review Data Last Updated: 2008-06-11 00:23:27 EST)
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| 05-14-08 | 3 | (NA) |
| Reviewer | Permalink | ||||||||||||||||||||||||
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I purchased the audio CDs to listen to in the car. It's a four or five CD set. I stopped after the second CD as it got very repetitve.
Most of it is Business 101. Get close to the customer, enable your org to innovate, leverage the existing brand when innovating.....that's about it. The rest of the book is a good run down on Proctor and Gamble. If you want to learn a lot about consumer marketing and branding then there is some good stuff in it. (Review Data Last Updated: 2008-05-20 03:19:15 EST)
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| 05-12-08 | 5 | (NA) |
| Reviewer | Permalink | ||||||||||||||||||||||||
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Innovative thinking is required to change the rules of a well-established "game" as well as to change how to play that game. In the business world, change initiatives are certain to encounter all manner of barriers, many of them the result of what James O'Toole so aptly characterizes as "the ideology of comfort and the tyranny of custom." Winners are those organizations whose innovative thinkers who come up with breakthrough ideas, not only about products and services but also in terms of how those products and services are designed, produced, marketed, and distributed. A.G, Lafley and Ram Charan call them "game-changers." In this book, they focus on P&G (of which Lafley now serves as chairman & CEO as well as on DuPont, GE, Honeywell, Lego Group, SAMSUNG, Target, and 3M. These and other "game-changers" demonstrate how to "drive revenue and profit growth with innovation." This is a seamless collaboration, with Lafley's "voice" generally dominant and Charan's perspectives suggesting the broader implications and applications of lessons to be learned from P&G. (The same is true of Execution that Charan co-authored with Larry Bossidy, former CEO of AlliedSignal/Honeywell.) Together, Lafley and Charan explain How and why innovation at P&G changed its game (Lafley) The significance of P&G's transformation (Charan) Why the customer is (almost always) the foundation of successful innovation How goals and strategies help to achieve game-changing innovation How to revitalize core strengths with innovation How to build "enabling structures" How to generate innovative ideas and then get them to market The risks of innovation and how to manage them Why innovation is a team sport What is needed to lead innovation and growth How Jeff Immelt "made innovation a way of life" at GE According to Lafley, his thoughts about "the fundamentals" of driving profitable growth with innovation developed over a period of many years prior to being appointed CEO by P&G's board, at a time when it as stock had fallen by 50% and it had lost more than $50-billion in market capitalization. However, "the reality is their sequencing and actually execution evolved by `muddling through.'" The development of his ideas required a process of experimentation and discovery and the same is true of anyone who attempts to apply any of those ideas. A few "simple but powerful things" enabled Lafley and his associates to "turn this ship around": 1. "We put the consumer at the center of everything we do...Our goal at P&G is to delight our consumers at two `moments of truth': first, when they buy a product, and second, when they use it. To achieve this, we live with our consumer and see the world and opportunities for new-product initiatives through their eyes." 2. "We opened up...Innovation is all about connections so we got everyone we can involved: P&Gers past and present; consumers and customers; suppliers; a wide range of `connect and develop' partners; even competitors." 3. "We made sustainable organic growth a priority [rather than acquired growth]. Innovation enables expansion into new categories, allows us to reframe businesses mature and transform them into platforms for profitable growth." 4. "We organized around innovation to drive sustained organic growth...By running a disciplined development, qualification, and commercialization process, we have proved we can manage a large portfolio of innovations in various stages of development." 5. "We began thinking about innovation in new ways...We started from the premise that it is possible to run an innovation program in much the same way we run a factory. There are inputs; these go through a series of transformative processes, creating out puts...[Also] we broadened the way we thought about innovation to include not just products, technologies, and services, but also business models, supply chains, and conceptual and cost innovations." Of special interest to me is the material presented in Part Two, Making Innovation Happen, as Lafley and Charan provide tools for creating organization structures that develop the ability to seek outside ideas and then channel them effectively inside the operations of the organization. They also describe in detail the practical framework for operational innovation - from generating ideas to going to marketing. "This process can help you bust the silos of the organization and make the flow of ideas seamless." At least that's the objective, although my own extensive experience with innovation initiatives suggests that the process of experimentation and discovery is seldom "seamless." On the contrary, it works best when it is continuous, unrestricted, free-flowing, inclusive, often confrontational, and almost always messy. Lafley and Charan fully realize that a different kind of leadership is needed if an organization is to develop a new mindset and management process for driving sustainable organic growth. Hence the importance of the eleven lessons to be learned from Jeff Immelt's leadership as CEO of GE. Each is examined in detail in the final chapter. I should add that these are lessons that anyone can apply at any level and in any area of her or his own organization, what its size and nature may be. For example, here's #1: "Consider how innovation could breathe new life into your existing business, segment, or product area and achieve higher goals. Become the source inspiration for others who don't see it yet. Make it part of your personal leadership agenda. Communicate it clearly and repeatedly, but don't stop at inspirational words and positive thoughts. Be prepared to make innovation happen." In other words, be ready to get some dirt under your nails. Those who share my high regard for this book are urged to check out Henry Chesbrough's Open Innovation: The New Imperative for Creating And Profiting from Technology and his more recent Open Business Models: How to Thrive in the New Innovation Landscape as well as two books by Thomas Kelley, The Art of Innovation: Lessons in Creativity from IDEO, America's Leading Design Firm and his more recent The Ten Faces of Innovation: IDEO's Strategies for Defeating the Devil's Advocate and Driving Creativity Throughout Your Organization with Jonathan Littman. Also James Champy's Outsmart!: How to Do What Your Competitors Can't, John E. Ettlie's Managing Innovation, (Second Edition): New Technology, New Products, and New Services in a Global Economy, Dean Spitzer's Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational Success, and Enterprise Architecture as Strategy: Creating a Foundation for Business Execution co-authored by Jeanne W. Ross, Peter Weill, and David Robertson. (Review Data Last Updated: 2008-05-20 03:19:15 EST)
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| 05-12-08 | 4 | (NA) |
| Reviewer | Permalink | ||||||||||||||||||||||||
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Lafley and Charan do an admirable job of defining innovation, breaking it down into bite-size chunks, and supporting their suppositions with real world examples. However I was a bit dissapointed that a book on innovation didn't break any new ground, or put forth anything "innovative" on the topic at hand.
Other than the case studies, most of the theories contained in this book are a tad worn, and can be found in virtually any other book on the subject. In my book Leadership Matters...The CEO Survival Manual: WHAT IT TAKES TO REACH THE C-SUITE AND STAY THERE I point out that following the "academic" or "best practices" approach toward innovation is simply counter-productive to creating the disruptive innovation being sought. While this book provides basic granular principles that the uninitiated might find useful as a leaping-off point, it will do little to serve as a road map for creating a sustainable culture of innovation. (Review Data Last Updated: 2008-05-20 03:19:15 EST)
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| 05-09-08 | 5 | (NA) |
| Reviewer | Permalink | ||||||||||||||||||||||||
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Many books have been written on the topic of Innovation. The fundamental difference in this book is that it defines Innovation as those ideas converted into products and services that ultimately are accepted by the end consumers. This means that top line and bottom bottom-line impacted positively are the real measures of successful innovations. It is the consumer who ultimately decides what a successful innovation is for her.
With the rich experience of the authors coupled with case studies at leading companies (primarily from P&G) both in the developed and emerging markets, this book is a must read for all those who want to understand the successful practice of innovation for sustaining growth and profits. The structure of the book and the sequencing of chapters are excellent. Starting with the concept of customer-centric Innovation that is game changing, the eight drivers that make it happen - Motivating Purpose and Values, Stretching Goals, Choiceful Strategies, Unique Core Strengths, Enabling Structures, Consistent & Reliable Systems, Courageous & Connected Culture and Inspiring Leadership are discussed in detail with highly relevant examples in practice. This approach then makes the book a practical guide in making Innovation an integral business process of Organizations, as opposed to the conventional view of relegating this core function to R&D. Functional silos are broken and ideas freely flow across with the end customer in mind. Innovation focuses not only on the features and functionality of products, but also the entire value chain of Design, Sourcing, Distribution and Service. Nokia, the global leader in mobiles phones is a good example. For the Indian market, now the second largest in terms of numbers, the company created low cost handsets, with unique features that the local market demanded. The concept of distributing vegetables was copied for distributing the low cost phones across the country where over 70 percent of the population lives in rural areas. Examples from P&G are superb, especially coming directly from none other that A.G. Lafley himself. My own personal experience in using P&G's products is a reflection customer delight. A good example is that of Hugo Boss, my favorite perfume. Only after reading the book, I realized that it is now a P&G Product, that I bought the first time a decade ago based on "pull" rather that the conventional "push" at retail outlets. Since then, I never forget to replenish the stock. If I were to remember one concept from this book, it is the "Living It" and "Working It" practice at P&G. P&G employees work in stores to observe how the customer shops and decides to buy her products and also live with them to learn from their actual experience in putting these products into use. Only such deep understanding can result in great products like Downy Single Rinse that saves precious water in water scarce regions of the world. There are two Moments of Truth say the authors. One is when the consumer decides to buy the product and the other is when she actually puts it to use. The winning moment which decides the winners amongst companies is when the satisfied customer comes back for more. Most of what is said, read in isolation, might appear as commonsense. But what makes this book great is that it puts together all the pieces of the value chain that makes innovation a regular practice for creating value with the customer in the middle. Such insight is hard to ignore and even harder to replicate. P&G as a great practitioner of leveraging global talent through open collaboration on the web is discussed in "Wikinomics: How Mass Collaboration Changes Everything" by Don Tapscott and Anthony D. Williams. This book elaborates this further while discussing "Connect and Develop" and many more avenues for successful collaboration. I found great synergies between the practices advocated by Gary Hamel in his book "The Future of Management" and the actual practices at P&G as described in this book. Innovations are ultimately about unleashing creativity and passion of all employees in the organization, with the sole purpose of delighting the customer. The final chapter of the book is devoted to GE's experience in innovation under the leadership of Jeffrey Immelt. I am sure that this giant will continue to bring better things to life with greater vigor! Excellent reading. (Review Data Last Updated: 2008-05-20 03:19:15 EST)
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| 04-22-08 | 5 | 6\6 |
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This book is both intriguing and highly useful. Procter & Gamble CEO A. G. Lafley and business author Ram Charan draw examples from several large, successful organizations - GE, Honeywell, Dupont - but their primary focus is Procter & Gamble (P&G). They explore how P&G changed from a staid giant to an organization driven by innovation - and radically expanded its sales and profits along the way. They are candid about P&G's organizational methods and failed innovations, and they show how willing it has become to open up and connect. getAbstract recommends this book to anyone who is interested in innovation on a corporate scale and wants to know how to make it happen.
(Review Data Last Updated: 2008-05-20 03:19:15 EST)
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| 04-08-08 | 5 | 9\12 |
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Authors A.G. Lafley and Ram Charan in "The Game-Changer" make the case that innovation - the conversion of a new idea into revenue and profits - does not have to follow conventional wisdom that small companies are better innovators because they are nimbler and have a more coherent sense of purpose. Lafley and Charan alternate throughout the book with Lafley, the operating executive, providing the "how' in how he turned around Proctor & Gamble by operationalizing innovation, and Charan, the organizational and business researcher, providing the "why" of its spectacular success.
Lafley admits to some truth in the small company stereotype but he believes larger companies can be just as innovative as small companies, if not more so. Big companies have significant advantages - scale, management capability, and resources to take risks - that should facilitate innovation. But these advantages are wasted due to layers of management that stretch decision cycle times, internal vested interests to maintain the status quo, and the lack of a growth-through-innovation process. "Game-Changers" outlines the principles(1) of innovation Lafley developed, the how and why innovation changed P&G's game, and the steps Lafley took to operationalize innovation which has led to the consumer-industry's leading organic sales growth rate. He believes that a disciplined innovation process, like that at P&G, can be central to growth for any company, in any industry. He cautions, though, that one size does not fit all, and each company must adapt the principles to their unique circumstances. Having spent the past 20 plus years in Silicon Valley shepherding innovative medical technologies to the market, I can personally attest that the acceleration of change today is unprecedented. There are many more opportunities today for teams like mine to disrupt and create obsolescence for larger companies. It appears that Lafley and Charan have got the principles right, and P&G appears to have gotten their application right. The remaining questions are: Will this be sustainable? Transferable? Will game-changers(2) become the next "big thing" in operational excellence? Footnotes: 1. The principles of innovation include: motivating purpose and values; stretching goals; choiceful strategies; unique core strengths; enabling structures; consistent and reliable systems; a courageous and connected culture; and inspiring leadership. 2. A game-changer is: 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 customer - not the CEO - is boss; a catalyst who uses innovation to drive every element of 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 chains of commoditization who creates differentiated and value-added brands and businesses through innovation; and a hardheaded humanist who sees innovation as a social process and understands that human interaction - how people talk and work together - is the key to innovation, not just technology. (Review Data Last Updated: 2008-04-19 03:39:19 EST)
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