The Game-Changer by A.G. Lafley And Ram Charan Is The Most Important Book On Innovation Out There.

Posted by: Bruce Nussbaum on April 14, 2008

Go buy The Game-Changer: How You Can Drive Revenue And Profit Growth With Innovation by A.G. Lafley immediately. Lafley, the remarkable CEO of Procter & Gamble, gives us the state-of-the-art in innovation. It tells you exactly what the best practices are in the one non-techie company that has embraced innovation as a total corporate strategy and as an organizational culture.

Lafley and Charan trade off chapters and sections but I admit to seeking out Lafley’s insights much more as I turned the pages. We’re kind of heard about Nokia and Lego. And Lafley gives us interesting detail for P&G.

Lafley gets to the heart of innovation today—consumer culture. He argues that, yeah, all companies, and especially companies such as P&G have always been focussed on the consumer. But NOT ENOUGH. Today, companies must be consumer-centric, consumer-driven and consumer created. To do that, managers must be one with the consumer culture. They must be anthropologists and sociologiest and deeply understand the myriad of consumer cultures around them. P&G has a Living It program where people live with their consumers for a time. It also has a Working It program where P&Gers get into shops and sell to consumers. Both immerse company people in the lives of their consumers.

Now here's another Big Thought. We are creating new consumer cultures at a tremendous rate together, thanks to social media. Each is different and each requires P&G and every other company to understand it. Thanks to technology, companies now have access to villages and cultures and languages all over the world--and they need to understand those "old" cultures.

Thanks to technology, new "villages" are created every day by like-minded people linking up to talk and do things. Mommies with blond twins in Nevada--or anything. Companies have to understand these "new" cultures.

And here's a final--and second Big Thought. The US used to be the center of the world. It didn't need to understand other cultures. It exported its culture to the rest of the globe. Other people in Asia, Europe, Latin America, the Middle East, Africa needed to understand American culture to succeed.

That's all over. For many reasons, economic, financial and geopolitical, the imperium has ended. The euro is equal to the dollar. Asia is rising. Power is distributed, not centralized. Growth is faster outside the US. Whatever.

So global corporations that are US-based, must now learn the cultures of the world, as well as the cultures of the internet.

This is why innovation is growing in importance today. It provides the tools to deal with this changing world.

Reader Comments

steve baker

April 15, 2008 1:25 AM

The euro is equal to the dollar? We can only wish it were true.

bruce nussbaum

April 15, 2008 2:22 PM

Steve,
Yep, of course you're right about the euro. It's not "equal" to the dollar in the sense of current value. I meant to say that the euro is now a global reserve currency, like the dollar, that central banks, corporations, and people increasingly put their money into. It's an alternative store of value, what we used to call a "numeraire."
That's important because countries with a numeraire currency get huge financial and political benefits.

Bruce

Christa Avampato

April 15, 2008 2:30 PM

I am part way through this book, and love it! I work for a company that has P&G as a vendor. I was lucky enough to visit their innovation center in Cincinnati last fall, and their human factors work as well as their empathy are impressive factors that figure into their innovation equation.

Christine Flanagan

April 15, 2008 9:56 PM

I wrote an article about P&G a couple of years ago called ‘Even Giants Start Small.’ In it, I use a quote by Elting Morrison to describe the company: “No intellectual heroism or psychic leap will take you from the development of the wheel immediately to the internal-combustion engine and the automobile.”

P&G experiments all the time. The success they’ve found is years in the making. They don’t have one open innovation initiative running – they have dozens. There’s just a mountain underneath their success in terms of the learning that took place, the evolution of programs and the various types of experimentation.

I’ll add one more big thought to your stream Bruce – back in 2001, when P&G came up with 90% of its innovations internally, A.G. Lafley publicly proclaimed that the company would work toward a goal of sourcing 50% of its innovation externally (they achieved that goal btw last year). Changing the mindset one of the world’s largest companies from ‘not invented here’ to ‘ideas can and will come from anywhere’ was a transformation that required research, commitment and a lot of motivation. Most importantly though – it required leadership. And that, I believe, is the secret sauce of innovation.

ranjeet

April 18, 2008 7:47 AM

i am a share holder of gillette india in india, p&g has started understanding our world and selling high quality product at affordable price. they have introduced product keeping customer need in mind and developed product which are relevant and tailored made for the indian masses.

Mike Bonifer

April 29, 2008 12:27 AM

For another perspective on changing the game (and a view that brands in the Networked World do not, in fact, 'drive revenue and profit' so much as they 'invite' the customer participation that generates it) you can look at...

www.gamechangers.com

Improvisation, day in and day out, at every level of an organization, is what generates an innovative environment that makes breakthroughs possible.

For obvious reasons, I'll have to check out the book. I used to punch peanut butter for P & G, and learned a lot from them and admire Lafley's approach to CEO-manship, even if if they did assign me to the unfortunately named town of Effingham, Illinois.

Nagwan Alqershi

January 1, 2009 3:56 PM

I want this book ASAP.

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About

Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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