Executive Times






2008 Book Reviews


The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation by A.G. Lafley and Ram Charan




(Highly Recommended)




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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


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