ShoppersMarketing | Retail Sales Accelerator

CEO’s ’Consumer is boss’ mantra works for Proctor & Gamble

By Associated Press | Monday, April 28, 2008

Simplistic-sounding, even a little hokey, his “the Consumer is Boss” mantra for P&G employees has worked. Sales, profits and stock price have climbed as the maker of such products as Pampers diapers, Crest toothpaste and Olay skin care has rebounded and grown in the eight years since Lafley was promoted to run a venerable company that was in a skid.

In an Associated Press interview, Lafley discussed the consumer philosophy and strategic changes he’s made, while remaining cagey about his future plans.

“The consumer is the key at the end,” Lafley said. “If we can get her or him involved at the beginning, we have a much better chance at success.”

P&G has long been a leader in consumer research, but under Lafley has expanded consumers’ role in product innovation, getting their feedback early in development and learning about their wants and needs by going into their online worlds, their suburban basement laundries and their villages in Mexico and China.

Going beyond traditional methods such as focus groups and one-way glass, P&G employees visit homes, shop with consumers and work in stores to see how they choose and use products. In a program called “Living It,” P&G employees live with a family for several days.

“We’re trying and using a lot more immersion techniques . . . so we really can understand what they do, not just what they say: what their unarticulated needs are, not just their articulated needs,” Lafley explained.

Lafley offered an example from his years in the P&G laundry business, when, he said, an annual Tide mail survey showed satisfaction with the detergent box.

“Then you would go into a home and go down to the basement,” he recounted. “You’d watch a woman open a Tide package and guess what? The vast majority of them would use a screwdriver or some other implement to push out the perforation on the side of the box.”

Easier-to-open boxes followed.

The company developed a Downy single-rinse fabric softener, Lafley says, after seeing that water availability and repeated rinsing were big issues for lower-income women in Mexico.

Lafley said he still visits homes, particularly in developing countries, and goes on shopping trips to observe. He also monitors consumer complaints.

“Frankly, they’re little jewels for us. What the consumer’s complaining about gives us opportunity to learn what we can do better,” he said.

Scott Anthony, president of Innosight LLC, a consulting company, said Lafley’s “Consumer is Boss” and other shorthand such as “Who is your Who (target consumer)?” drive the global company because it’s clear they aren’t just buzz phrases for him.

“You go inside Procter & Gamble and it’s not just a slogan, it’s part of the fabric of the organization,” Anthony said. “The depth of conviction allows him to lead in a powerful way.”

Lafley, whose recently published first book, “The Game-Changer,” focuses on the role of innovation in business, leads the only consumer products company in BusinessWeek magazine’s survey of the top 25 most innovative companies out this month; it’s ranked eighth. P&G has opened up to recruit ideas and innovation from outside the company in what Lafley calls “connect and develop.”