Lafley: How CEOs Can Create Winning Talent Strategies

A.G. Lafley
A.G. Lafley

“I just don’t believe that,” says the former chairman and CEO of Procter & Gamble. He held the CEO role at the consumer goods giant from 2000-2010 and again from 2013-2015. “I believe there is a lot of talent and that one of the big jobs a CEO has is to bring all the talent he or she can out of the people they have.”

The other big thing CEOs have to do is to make sure the fit is right, says Lafley. “You’re looking for the right player in the right job at the right time, who can make the greatest impact.” He draws a comparison to the classic GE general management strategy, which was based on the notion that a company should focus on finding the best all-around player, even if that person was from an entirely different industry. “A lot of companies got caught in that trap of, we’ll hire the most talented person out there and he or she will learn the business and do well,” says Lafley. “That turned out not to work. There may be one LeBron James who can play four positions, but most people in the NBA are lucky if they can play one position well.”

Finding the right person for the right job at the right time means getting to know high-potentials well; gathering feedback from customers, suppliers, and investors; and eliminating—as much as possible—personal biases, focusing instead on results. “I hate to say it, but board members have management favorites,” says Lafley. “It could be they went to the same school, came from the same background, have a similar personality type. But the CEO has to be as objective as possible.”

“The CEO has to have a deep belief, and then act according to that belief, that talent really matters.”

To make sure he was achieving that, Lafley evaluated business heads via blind assessment. He gathered years’ worth of business results—financial results, organizational survey results, performance data for the division run by each candidate—and put it all into a spreadsheet without names. “It’s amazing what you see,” he says. “Some people who are very good—even outstanding—in terms of performance and business leadership strategic capabilities aren’t assessed at the absolute top because somebody else is a better presenter or looks more like the boss, etc.”

Once the CEO has identified the best candidates for a specific role, he or she has to help guide them to the next level, says Lafley, who estimates that as CEO, he spent one-third to one-half of his time on some form of coaching or teaching. “The CEO job is a coaching job and if you’re playing instead of coaching, you have a problem.”

While at small and midsize companies, CEOs also may have to play occasionally, the importance of developing people is the same, regardless of company size. “When you cut through it all, it’s all about the talent. You could even make the argument that the only sustainable competitive advantage you have is: are your players better than their players?” says Lafley. “But the CEO has to have a deep belief, and then act according to that belief, that talent really matters.”

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