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Executive Times |
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2008 Book Reviews |
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The
Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation
by A.G. Lafley and Ram Charan |
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Rating: |
**** |
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(Highly Recommended) |
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Click
on title or picture to buy from amazon.com |
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Inquisitive Procter
and Gamble CEO A.G. Lafley collaborated with management guru Ram Charan to
present a fine new book titled, The
Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation.
Together they present what seems to be sound theory and practical ways to
implement an approach to innovation that is likely to lead to success. At the
end of each chapter there are great Monday morning questions that will prompt
a reader’s reflection about the topics at hand. While there are many examples
from P&G throughout the book, there are enough stories about what
executives in other companies have done to succeed that this book doesn’t
become a saga solely focused on what P&G does. Here’s an excerpt, from
the end of Chapter 5, “Leveraging What You Do Best,” pp. 112-114: The stereotype is that small
companies are better innovators because they are nimbler and have a more
coherent sense of purpose. There is an element of truth to that, but the fact
is that big companies also have advantages—scale, management capability, and
the resources to take risks. So why don't big companies do
better? Two reasons: They don't have a growth process in place (a problem in
many small firms, too, where the leader is the process); and second,
because the layers of management stretch out cycle times. There is a paradox
here—the curse of not enough organization, or too much. But this is not that
surprising. Big companies are complicated entities; it is all too possible
for a large firm to get the bureaucracy wrong, in different ways, in different
places. But it is not impossible to get it right—as Toyota does with its
knack of applying the right resources on the right pressure points at the
right time. Big companies are likely to
have operations in different countries. That gives them a built-in innovation
edge—if only they use it. Cross- cultural diversity is a great driver of
ideas and innovation. Still, there is great opportunity to work more globally,
as is the case with supply chain networks. Pantene, for example is one of
P&G's most global businesses and has been run this way for nearly two
decades. Pantene became part of P&G
in the 1985 acquisition of Richardson- Vicks; at the time of purchase, it was
small (in P&G terms), with annual sales of $40 million. A few years
later, the Taiwan office was looking for a way to score bigger in the local
hair-care market, where its market share was languishing. The Taiwan brand
manager decided to reframe Pantene as a high-end beauty product versus just
another shampoo. The team created a new brand equity of "shine through
health.” To give the positioning meaning and differentiate it, the team
members did several things. First, they introduced this new positioning at
the same time they launched a new, disruptive product innovation: the first
shampoo to provide salon-level hair conditioning at home.
They also added provitamins to the shampoo formula to reinforce the hair
"health" benefit and redesigned the bottle to make it look more
cosmetic, upscale, and salonlike. Finally, the advertising agency developed a
provocative way to dramatically showcase the new equity by using the now
well-known "hair-drop shot" of a woman lifting and dropping her
healthy, shiny, and beautiful Pantene hair. This shot was used for over a
decade in a myriad of TV commercials that ran around the world. After
some tweaking, the brand took off and the new, improved Pantene spread
throughout the Pacific region, then eventually to Latin America, Europe, and
the United States. "What Pantene did was turn shampoo from a commodity
to a beauty product," says Sonsoles Gonzalez, the Pantene global-brand
franchise leader. "That was almost a revolution in the category?' By the
mid-1990s, Pantene was a billion-dollar brand; now it is close to $3
billion—and it all started in Taiwan. The fact that a brand repositioning
could be successfully launched from outside the mother ship in Ohio helped
open eyes and minds to the larger possibilities of truly global innovation. In
an age when knowledge workers can work from anywhere, companies are missing
the boat if they do not tap the diversity that exists across cultures,
geographies, boundaries, and time zones. The value is in combining creativity
that comes from anywhere and everywhere. Intellectual capital is global; the
innovation-oriented company creates an ambience that permits ideas to flow
from outside in and all around. P&G
has always known how to create well-differentiated products with unique
attributes and benefits. It didn't have a design capability or a broad
game-changing innovation culture that excelled at creating a delightful
shopping or usage experience. An innovation capability that drew on all
available sources of innovation enables the consumer to experience and, in a
real sense, actually "feel" the design, not the underlying product
technology. The technology is important—because it underpins the
distinguishing product benefits. But design brings the benefits to life, and
the feeling is often the differentiator for the consumer. In the marketplace,
P&G brands and products stand for
election hundreds of millions of times a day; design is an important part of
winning consumer votes. P&G's ambition is to become a top design company
as part of becoming the innovation leader in its industry, because
world-class innovation supported by world-class design is a game-changer. It
is a powerful combination in the journey to be a consistent and sustainable
growth company. The concept of core capabilities
or core strengths is easy to understand, but the practice of choosing the
few potentially decisive strengths that can create real, sustainable
advantage is hard to do. Why? Because too many companies get caught up in
consultants' "capability du jour" or chase what other competitors
or industries are doing. Choosing core strengths requires deep thinking and
hardheaded choices about what it really takes to win in your industry or
market, and then playing to your few real strengths—core capabilities where
you already have competitive advantage or can acquire or build competitive
advantage. The work of selecting core strengths takes careful analysis, real
objectivity, and tough-minded discipline. It is the work of decisive leaders. Without
clear goals, choiceful strategies, and consensus about a company, business,
or function's core strengths, the important work of making innovation
happen—organizing for innovation and integrating innovation processes into
other everyday work processes—cannot, or at least should not, begin. As long as consultant-speak
words like “choiceful” don’t drive you up the wall (I admit to wincing at
times), the content of The
Game-Changer will provide new ways to think about and implement
innovation by you and your organization. Whether you follow the approaches
recommended or not, it’s a valuable use of executive time to examine and
consider what some other organizations and advisors are pursuing in this
area. Steve
Hopkins, September 20, 2008 |
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The recommendation rating for
this book appeared in the October 2008 issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/The Game Changer.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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