Ceo A.G. Lafley and Procter and Gamble - Effective Leadership

1672 Words May 3rd, 2008 7 Pages
Once America’s most innovative consumer products company, Procter and Gamble (P&G) started by selling soaps and candles in a small Cincinnati storefront in 1837 (Procter and Gamble, 2008). After a hundred and seventy-one years P&G has grown to over one hundred household brands in over eighty countries (Markels 2006). Their products range from air fresheners to prescription drugs. However, as P&G headed into the twenty-first century they announced that they would not be meeting their 1st quarter earnings forecast [Lafley, 2003]. Revenue margins were dropping and P&G was quickly losing market share to Kimberly Clark and Johnson & Johnson. After missed earnings P&G’s stock price fell from $59.18 to $26.50 between January 2000 and March 2000 …show more content…
No longer were top executives confined to their lush private offices but put to work in a cubicle farm where open communication and interaction were encouraged, while the rest of the space was dedicated to a center for employee learning [Charles p.422]. Which reflects his understanding that change flows from above and that being an effective leader means modeling desired behaviors.

Lafley instructed top management to focus on selling the company’s core 20 brands in an effort to regain market share. He didn’t feel that P&G needed a radical make over but just needed to focus on selling more of what it already had, such as Tide and Pampers, which were two of P&G’s products that were generating more then a billion each in sales [Charles p.422]. This would increase P&G’s revenues without utilizing more resources, as a new product launch would require. He also pushed his managers to add value to P&G’s products by being more attentive to the customer’s wants. This lead to the development of a best selling diaper by Pampers called Feel-n-Learn Trainers, which was a response in the market to mothers who were frustrated with trying to potty train their children.

He cut jobs, closed down new product projects, and sold off brands that did not fit P&G strategic plan, such as Crisco and Jif, which were more staple food products then staple household

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