Sustainable Growth: Lessons from A.G. Lafley (part 2)

(Continued from last post)

Where to play?

From the Core/Adjacencies.

In P&G's case, they understand their consumers better than any other company on the planet in CPG. They know each type of buyer, regional data and have so much knowledge, that they have pioneered consumer research methods and spend over $250 Million a year to understand their buyers. They use this data in a productive and proactive capacity to reinvest capital into additional value-added products that appeal to the same buyers. They expanded their footprint in personal care in brands and product lines that are able to capitalize on buyer habits and consumer interest. They don't take unadulterated risks in unknown sectors, yet baby steps away from their core, which he called adjacencies.

To apply this concept into your business, simply understand the 2 degrees of separation philosophy and expand your products based upon the market knowledge and buyer behavior related to new opportunities in your adjacencies.

To next deploy a strategy and draw up a tactical plan, A.G. recommends the best structure is the least structure and most flexible, cross-functional team. Keep it small and grow the team organically.

Innovation. 4 steps. Concept to Market. Idea-Development-Qualification-Commercialization. Protoype fast/early/often and cheap.

Leadership. Leaders aren't born. The quality is a learned trait, only measured by ability to execute and create momentum. It's a choice and is deliberately an outcome of proper execution.

Total Quality Management. You will know when you have achieved a TQM cultural reality when all your employees tell you the truth all the time. Culture is the thing that happens when you aren't asking, helping, pushing or looking (managing).

Finally, Think before you act, and act often. This will make you think and encourage methodical risk taking.

Go.

Performance trumps everything.