Lafley's Legacy: From Crisis to Consumer-Driven

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In a world where blue chip companies including Hewlett-Packard (HPQ), 3M (MMM), Boeing (BA), IBM (IBM), and Merck (MRK) have had broken leadership pipelines requiring outside CEO hiring, Lafley had multiple candidates in the pipeline, because he made it his priority and gave it his time and energy.

4. Shaping Values and Standards

Drucker's view is that "CEOs set the values, the standards, the ethics of an organization. They either lead or they mislead." Lafley leads as the role model of the values and also as the head teacher at P&G.

5. Setting a Global Standard for Sustainability

The final aspect of the Lafley legacy is as a global citizen. He is well on his way to being the platinum standard for sustainability. His publicly stated objectives are: 1. To develop and market at least $50 billion in cumulative sales of sustainable innovation products. 2. To deliver a 20% reduction (per unit of production) in carbon dioxide emissions, energy consumption, water usage, and disposed waste from P&G plants, leading to a total reduction over the decade of at least 50%. 4. Enable 300 million children to live, learn, and thrive, and deliver 3 billion liters of clear water through P&G's Children's Safe Drinking Water program.

He aims to engage all 138,000 employees in more than 40 countries in his sustainability effort. Lafley believes that transformative change at P&G must include outside perspective and partnerships. A good example of this is how BusinessWeek and six MBA schools formed partnerships with Lafley and P&G to come up with innovative ideas for engaging his 138,000 employees on sustainability. Many of the ideas that came out of the B-school project, such as creating a sustainability dashboard for leaders throughout P&G, ways of reducing water usage within P&G, as well as global educational and action programs for all employees, are being implemented by Lafley and his team.

It was one more manifestation of a transformed P&G, open to ideas from outside, action-oriented, and collaborative, tackling important problems for consumers and the world. Although his accomplishments are great—a more focused portfolio, having successfully integrated the $80 billion Gillette acquisition, and building a leadership pipeline that produced his successor—his achievements in sustainability may be his most important legacy.

Dr. Noel M. Tichy is a professor of management and organizations at the Ross School of Business at the University of Michigan, where he is the director of the Global Business Partnership. His most recent book is Judgment: How Winning Leaders Make Great Calls, written with Warren Bennis and published in 2007.

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