Por Que Ceo Puede

C E O
2 Harvard Business Review
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What Only the
Procter & Gamble’s CEO on the most important things to focus on, wherever you are in the business cycle
by A.G. Lafley

I became Procter & Gamble’s CEO in June 2000, in the midst of a crisis. On March 7 of that year the company had announced that it would not meet its projected third-quarter earnings, and the stock price plummeted from $86to $60 in one day, leading the Dow Jones Industrial Average to a 374-point decline. The price dropped another 11% during the week my appointment was announced. A number of factors had contributed to the mess we were in, chief among them an overly ambitious organizational transformation in which we tried to change too much too fast and which distracted us from running the everyday business withexcellence. But our biggest problem in the summer of 2000 was not the loss of $85 billion in market capitalization. It was a crisis of confidence. Many of P&G’s leaders had retreated to their bunkers. Business units were blaming headquarters for poor results, and headquarters was blaming the units. Investors and financial analysts were surprised and angry. Employees were calling

May 2009

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Harvard Business Review 3

What Only the CeO Can Do

in a way that enables sustainable sales, profit, and total shareholder return (TSR) growth. » Conventional wisdom suggests It’s a job that only CEOs can dobethat the CEO is primarily a coach cause everybody else in the organizaand a utility infielder, dropping in to tion is focused much more narrowly solve problems where they crop up. and, for the most part, in one direction: » In fact, however, the CEO has a Salespeople are externally focused; just very specific job that only he or she about everyone else is inwardly focused. can do: link the externalworld with Integrating the outside and the inside the internal organization. is hard; it’s far easier to pick one. The » It’s a job that only the CEO can do CEO can see opportunities that others because everybody else in the ordon’t see and, as the one person whose ganization focuses much more narboss isn’t another company employee, rowly and almost always internally. make the judgments and thetough » It’s a job that the CEO must do calls others are unable to make. The because without the outside there CEO is the only one held accountable is no inside. for the performance and results of the company – according not just to its own goals but also to the measures and standards of diverse and often competing external stakeholders. The Work of the CEO And it’s a job that CEOs must do becausewithout the outIn October 2004 I looked back on that first day and the even side, there is no inside. The sustainable growth of the institumore difficult weeks that followed as I sat with Peter Drucker tion is the CEO’s responsibility and legacy, and inward focus is and several other CEOs and management scholars who had the enemy of growth. At P&G our goals are 4% to 6% organic come together to ask,“What is the work of the CEO?” (Most of the quotations in this article come from Drucker’s notes for sales growth and 10% or better earnings-per-share growth. To the remarks he made on that occasion.) achieve 4% sales growth, we need to add the equivalent of a It seemed an odd question, because enormous attention has new Tide brand; to achieve 6%, the equivalent of a new P&G been paid to CEOs,who are alternately revered as corporate Latin American business. Every year. We won’t succeed withsaviors and reviled as corporate scoundrels. Yet the question out a deep understanding of external stakeholders and their remained: Do we really understand the role and the unique competing interests, and how those interests correspond with work of the chief executive? Drucker believed the answer was...