P&G's Legendary Ex-Chief On How Today's CEOs Are Failing
In a recent interview, Lafley told the Wall Street Journal what he saw as current CEOs' biggest shortcoming:
They don’t think they need a strategy, or their strategies are flawed. They think they have a hot product or hot service, and these don’t last forever. They think that benchmarking, best practices and copying what the rest of the industry does is a strategy. They try to be all things to all people. If you’re not clear about which customers you’re going to serve, how to serve them in a unique and better way that creates real value for them, and your core competencies, you’re just not going to have as much of a chance to win.
Essentially, Lafley is arguing, executives hate to make choices. When they take charge and commit to a strategy or a particular customer group, they become responsible for the consequences.
Instead, they play it safe. They look to best practices, and they look to competitors. That may be the easiest path, but that's not one where you can win.
They also get seduced by success, expecting that what's worked in the past will serve them just as well in the future.
During his time at P&G, Lafley developed a 5-step program designed not just to succeed in a market, but to win it entirely, which he lays out in "Playing To Win." Businesses have to decide what winning is, where to play, how to win, what their core competencies are, and what management systems they need to execute their strategy.
Not only that, but they have to build those kinds of questions into their culture, so things are approached strategically on every level and constantly re-evaluated.