Books: How to innovate and change the rules of the game? P&G CEO AG Lafley & management Guru Ram Charan tell us how

According to the latest management tome by A. G. Lafley, chairman and CEO of Procter & Gamble and noted management guru Ram Charan, a Game-changer is 1. a visionary strategist who alter the game his business plays or conceives an entirely new game. 2. a creator who use innovation as the basis for sustaining profitable organic growth and consistently improving margins. 3. a leader who understand that the consumer or customernot the CEOis boss. 4. a catalyst who use innovation to drive every element of a business from strategy to organization, and from budgeting resource allocation to selecting, rewarding, and promoting people. The list of accomplishments of a Game-Changer is really long! But what makes one a Game-changer? The Game-Changer: How Every Leader Can Drive Everyday Innovation by A.G. Lafley and Ram Charan offers insights into the phenomenon and how to become one.

MBAUniverse.com editorial staff read the book and offers highlights from the book.
The Game-Changer is the result of A. G. Lafleys experience with setting Procter & Gamble on a new path for increasing organic growth and Ram Charans wrestling for more than a decade with why making innovation happen routinely was such a dilemma, much talked about but elusive in term of getting much done.

In early 2001, Ram Charan began working with one company on a framework to operationalize the way an idea moves from the person who has it to a product that is useful in the marketplace. While the company was successful in bringing to innovation in market, its success was episodic. The reason, Ram observed, was that the process of innovation was fragmented and done mechanically. The problem accelerated Rams interest and research. And, in 2005, he had the opportunity to meet A. G. Lafley, after following the progress that P&G made since A. G. became CEO in June of 2000. Lafley, Ram observed, seemed to have made breakthrough. Innovation at P&G was granular. It was part of what business unit managers did day in and day out. The goal, they both agreed, was to distill their experience and research and extract the lesson that could be used by others. This lead to the book the Game Changer.

Writes Lafley, My job at Procter & Gamble is focused on integrating innovation into everything wedo. Every business has some central organizing principle that people use as the basis for the marketing decisions, meeting challenges, and creating opportunities. For P&G, it is innovation. Innovation must be the central driving force for any business that wants to grow and succeed in both the short and long terms. We live in a time when the rate of change is such as todays unique product or service becomes tomorrows commodity. Winningplaying the game better than your competitors and changing the game when necessaryrequires finding a new way to sustain organic revenue and profit growth and consistently improve margins. This mean seeing innovation not as something left to the R&D department, but as the central foundation in the way you run your business, driving key decisions, be they choice goals, strategy, organization structure, resource allocation, commitment to budgets, or development of leadership.

In the book, Lafley goes down the memory lane, and recalls that when he took over as the CEO of P&G in 2000, the business was in bad shape. Write Lafley, P&G was struggling. Wed issued a big earning profit warning in March, and the business was still coming in blow expectations. Proud P&Gers, we were embarrassed by recent results. We wanted to turn this ship around.

Under Lafley P&G made a turnaround by focusing on a few simple but powerful things. On his turnaround strategy, Lafley says:

a) We put the consumer at the center of everything we do. Our goal at P&G is to delight our consumers at two moments of truth: first, when they buy a product, and second, when they use it. To achieve that, we live with our consumer and see the world and opportunities for new-product initiative through their eyes. Consumers are now at the center of every key decision we lake in a routine and disciplined, not episodic way.
b) We opened up. Long known for a preference to do everything in-house we began to seek out innovation from any and all sources, inside and outside the company.
c) We made sustainable organic growth the priority. Innovation enables expansion into new categories, allows us to reframe business considered mature and transform them into platform for profitable growth, and creates bridge into adjacent segments. So we changed our emphasis to organic growth, which is less risky than acquired growth and more highly valued by investors.
d) We organized around innovation to drive sustained organic growth. To get organic growth, we needed to innovate. We had to become a more consistent operator, and a much more consistent operator, and a much more consistent and reliable innovator. I consciously set out to restore innovation to the heart of P&G.
e) We began thinking about innovation in new ways. We started from the premise that it is possible to run an innovation program in much the same way we run a factory. There are inputs; these through a series of transformative processes, creating outputs. It is possible to measure the yield of each process, including the quality, the end product, and the financial and market results.

Talking about Innovation as an Integrated Management Process, Lafley & Charan says, For innovation to have a payofffor it to generate sustainable organic sales and profit growthit must be integrated in to how you run your business: its overall purpose, goals and strategies, structure and systems, leadership and culture. The book offers eight drivers of innovation management in corporations:

1. Motivating purpose and values
2. Stretching goals
3. Choiceful strategies
4. Unique core strengths
5. Enabling structures
6. Consistent and reliable systems
7. Courageous and connected culture
8. Inspiring leadership

Lafleys Innovation mantras are clearly working for P&G. The numbers tell the story. Sales growth and net present value of the total innovation portfolio have more than doubled.
In all, Game-Changer is one book management students and practitioners must read to learn from the real life lessons of one of the most successful global CEOs of our times, and also gain from the incisive analysis of leading management consultant.

A. G. Lafley is the chairman and CEO of Procter & Gamble, which is consistently recognized as one of the most admired companies in the world and a great developer of business Leaders. He went to Harvard Business School, and then joined P&G following graduation. He started as a brand assistant for a joy in 1977 and was appointed CEO in June 2000.

Ram Charan is coauthor of the bestseller Execution and the author of What the Customer Wants You to Know, What the CEO Know You to Know, and many other books. Dr. Charan grew up in India, where he first learned the art and science of business in his familys shoe shop. After earning his MBA and DBA from Harvard Business School, he taught for a number for years at Harvard and Northwestern. He now advises the leaders and boards of companies around the world, including GE, Dupont, Nokia, Verzion and The Thomson Corporation.