John Pepper, if you don’t know, is a former president, CEO, and chairman of Proctor & Gamble, just about the largest consumer products company in the world, and frequently one of those “best in class” companies written about in business books. Pepper’s book title is intentionally provocative, and here’s the paragraph in his preface that explains why he chose it.
My intention is to share certain principles and insights based on what really matters -- on what, over the course of a career of more than forty years, I have come to believe is essential to the development of enduring brands, to the meaningful growth of organizations of all kinds, and to individual careers. This book isn’t meant to be studied academically or read passively. Instead, I want to make a difference in your understanding of what leads to success, both personally and professionally. Most important, I want to underscore the responsibility each of us has to help shape the success and character of the institutions to which we belong. Under the right conditions and the proper leadership, I have witnessed countless acts of heroism and sacrifice that have profoundly affected the success of companies and the quality of life of customers, employees and communities. These acts were seldom the result of grand financial gambits of the kind you read about in the paper, but rather were carried out by ordinary people with vision, courage, and resolve working individually and together.
I was at first skeptical that Pepper’s corporate brand focus would carry many lessons for me -- the executive of a non-profit trade association -- but I think I was wrong about that. As I read, I stumbled into more parallels than I would have imagined. Here’s a not-so-quick summary of those lessons.
Work/Life Balance
Here’s a quick one, right out of the book’s preface.
By reading this book I hope you will learn, as I have, that a deep and sincere interest not only in the men and women working in your organization, but also in their families, makes a special contribution to the building of community and to feelings of loyalty and ownership among employees. Try as any company might, there are no simple and clean divisions between personal and work lives, and it is impossible for people to pretend they live in two entirely separate worlds. Because we always wanted whole people working at P&G, we extended our social range beyond employees to family members, and welcomed those who wished to participate in this larger community.
It’s refreshing to see this idea stated so simply and obviously. People have both personal and professional lives, and the best and most satisfied people are those who don’t have to pretend one doesn’t exist while they’re operating in the other. For your benefit, and the benefit of your employees, let’s all stop pretending as if there is anything that needs “balancing”.
Brand-Building Success Factors
Five factors are critical to any company’s ability to create leadership brands and keep them young year after year, decade after decade. Only when all of these factors are present -- not three or four, but all of them -- will companies be able to create and build these important and profitable leadership brands.
When Pepper talks about brands he’s talking about things like Ivory soap, Tide laundry detergent, and Bounce fabric softener. In a company like P&G, these brands are essentially business units of their own, each with its own “president,” and a team of people responsible for the R&D, production, marketing, and sales of the brand. As I said earlier, I was at first skeptical that this environment would have any parallels to mine, but as I read I quickly saw the advantages associated with adopting more of a “brand mindset” for the various programs and services my association runs.
Let’s take a look at Pepper’s five brand-building success factors and see what lessons each may have for us.
1. A Passion for Providing New Benefits to Customers
Two motivations drive the passion of successful corporate leaders: to improve the lives of consumers through company brands, and, by doing so, to help their businesses continue to lead and grow. P&G in particular operates with the mindset that its growth depends on both its ability to create brands with new benefits and its proficiency in establishing whole new businesses capable of growing over time. This is what disposable diapers and fabric softeners did when they were introduced years ago. It is what Febreze and Swiffer are doing today. This commitment to provide benefits never before available and to build businesses that didn’t exist is not the province of any one person or position; instead it must be present at every level, from the CEO to the women and men who take the brands to consumers in the most remote areas of the world.
This may be the most critical and the most difficult lesson for associations to learn. Every new program or service we launch, or every new enhancement we make to each existing program or service, should improve the lives of our “consumers”, and at the same time should be built on a business platform that is capable of growing over time. If we can successfully do that, we build both the essential connections that we need to our members, and we enable the sustainability that we need to keep those connections functioning over time. Way easier said than done.
2. A Commitment to Understand Consumer Needs
Proctor & Gamble was the first company to conduct broad-based, reliable consumer research. The endeavor started in 1924 as market researchers fanned out across the United States, calling on consumers in their homes. A commitment to effective consumer research has been a P&G tradition ever since. When its leaders have failed to honor this commitment, perhaps through undue focus on speed or a cavalier assumption that they know more than consumers, the business has suffered predictably.
This one associations are better at, but that phrase “perhaps through undue focus on speed” really hits home. Too often, associations are encouraged to act more like for-profit businesses, and that is often interpreted to mean that they need to move more quickly. I try to be a vocal advocate for the opposite, that an association’s slower pace is one of its strengths, not weaknesses, but only when it uses that slower pace to do things like what Pepper is advocating in this paragraph. Understanding what members need is something we can best learn from the members themselves.
3. An Ability to Create Winning Strategies and Business Models
What constitutes a winning strategy and business model will vary by brand and by category. The models also may change within brands as consumer needs and preferences evolve and new technologies emerge. Still, a winning brand strategy and business model are invariably built on the following three elements: (1) Providing consumers with a product of superior performance that addressed a very important need. … (2) Communicating these benefits to consumers through distinctive and compelling marketing. … (3) A product price that provides superior value for consumers and adequate financial returns for the company.
This one feels like it overlaps with Pepper’s first point, and suffers from my most dreaded attribute of business books. Here’s a list of five things. Now, the third thing is actually made up of three things. And that second thing, we’ll that’s actually got four parts to it. I exaggerate, but you get my point. Still, this is pretty solid advice for associations, with of course the recognition that the “product price” in question is often the dues that a member pays to the association, and through which all or many services are delivered.
4. An Ability to Develop Technologies Internally and Externally
Proctor & Gamble is perhaps engaged in work across more technologies than any other consumer goods company in the world. From surfactants to polymers, from nitrates to nutritionals, from bone-building elements to flavors and fragrances, P&G has improved a product in one part of the business by using breakthrough technology originally developed in another part of the business.
Pepper will go on to cite several examples (e.g., the ability to control calcium to achieve superior cleaning in its laundry detergent led to technologies controlling bone mineral resorption in their osteoporosis-fighting drug), and they are all dependent on a very literal understanding of the word “technology”. For associations, I would recommend a looser definition, one that includes business practices, marketing tactics, and engagement strategies. Any large or decentralized association is clearly doing things in one part of the business that other parts of the business could benefit from. Finding ways to foster and accelerate a cross-fertilization of ideas is probably one of the most important tasks of the association leadership.
5. The Role of the “Champion” Corporate Leader
Brand-building successes are often described as if they were destined to happen, but of course, they were not. They occurred only because of the insight of individuals who were unrelenting in pursuing their visions for a great business. They happened because someone saw a way to bring forth and innovation to satisfy customers or gain stronger support from trade customers. They happened because people were determined and able to gain a big edge over the competition.
Here, Pepper will go on to cite several examples of people in his organization who made success happen because of their conviction, courage, and persistence. And, I think, it is the same in associations -- perhaps more so. I regularly preach to my employees the value of personal initiative and persistence. Most of the things we’re trying to do as an association are hard, and new programs can easily get squashed for lack of attention, definition, or promotion. The role of the individual program manager -- what Pepper might call the brand manager -- is critical in this competitive environment. People who believe in their programs, and fight aggressively for them, frequently have the best program outcomes and separate themselves from the apathy and ease that might otherwise surround them.
Making Decisions Based on Principle
Pepper spends a lot of time in this book talking about principles, and the importance of letting them guide your business decisions.
It will always be the tough decisions that require us to choose between short-term expediency and long-term goals, and that determine whether our commitment to do the right thing is merely a nice-sounding pledge, or something we live by no matter what. Consistently making decisions based on principle is not always easy. A few lofty words in a book can make it sound simple and commonplace, but it is not. Ed Harness at P&G confronted this reality head on: “Hardly a day passes when each of us doesn’t have the occasion to make a decision, large or small, involving a choice between the expedient and the principled. Making a hard decision, the decision based on principle, usually seems to involve a short-term sacrifice on the part of the Company. Our history clearly demonstrates that we’ve gotten where we are through consistency in making our decisions as a matter of principle. This Company must continue operating on the principle of what it believes is right rather than what will make everyone happy next week.”
The fact that Ed speaks of a capital “C” company might give you a clue as to where he’s coming from. More important to me, however, was the realization about this time in the narrative that “making decisions based on principles” was an abstract principle in and of itself. The rubber only hit the road when you took time to define what those principles are. And that, although Pepper had not specifically pointed it out, based on his running commentary, it seemed the only principle that made sense in Ed’s context was the one that said “we will always do what it in the interests of long-term growth and profitability.”
Here’s an example that Pepper himself provides.
Just ask Jorge Montoya, former president of our Latin American business in 1985. It was a difficult period. The business was fragile, making less than half-a-billion dollars in annual sales and virtually no profit. Montoya arrived in Mexico to learn that P&G’s major account, representing 30 percent of our business, was literally boycotting every P&G brand. Why? One of the buyers had asked the company to give him a new car, and Jorge had said “No way!” It took three months to get past the boycott, during which the company lost money. Finally a friend told the buyer that P&G just wouldn’t change its policy, and the boycott was withdrawn.
In other words, an expedient decision that keeps people happy may be to succumb to the extortion threats of your buyers, while a principled decision that aligns with what the Company thinks is right may be to resist extortion and treat all buyers fairly and equally. In the first case, the problem is resolved in the short-term, but a deeper, more systemic problem is created when other buyers realize you can be extorted. In the second, a lot of short-term pain occurs, but when all the buyers realize you will treat them fairly, they are more likely to do business with you and to support your long-term growth.
All that makes sense. But all of that is squarely in the domain of stakeholders with the ability to threaten the long-term growth of the company. What happens when the choice deals with stakeholders that have no such power -- low-level employees, for example, or maybe the environment. The expedient decision that keeps people happy would seem a lot more appealing if the downside only threatens other people’s livelihoods. Something other than “making decisions based on principles” is going to be needed for a company to successfully navigate those waters.
It Starts With Consumers
This one probably resonates with my association-based perspective the strongest.
We must be intimate with consumers. We cannot merely consider them some aggregate compilation of statistics or demographics -- instead, we must put ourselves in their shoes and their mindset, respecting and liking them as individuals. The day we stop thinking about consumers as living, feeling individuals, and the day we stop caring about what we can do to make their lives better through the brands we create and the information we provide, will be the day we stop helping our institutions be the best they can be.
Read that paragraph again with the following word substitutions. Replace “consumers” with “members.” Replace “brands” with “programs.” Replace “institutions” with “associations.”
Yup. That.
"Liking then as individuals" is a critically-important piece of this spot-on advice. Association staff must like the members of their association as individuals if the association is going to be a successful association. Someone besides me should write an entire book on the importance of that single fact.
Key Leadership Skill Behaviors
Finally, I found this chart compelling.
As I read it through, I found myself asking how many of these bullets routinely get lost in the shuffle? Answer: Too many. And therefore, how do I give them more focus? One idea I plan to act on is to pin it up on my bulletin board in my office, and make it a kind of daily devotional.
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This post first appeared on Eric Lanke's blog, an association executive and author. You can follow him on Twitter @ericlanke or contact him at eric.lanke@gmail.com.
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