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5 things P&G's new CEO needs to get right

October 15, 2015
Borderless Leadership

Company veteran David Taylor is Procter & Gamble’s third CEO appointment in six years. Here’s a little advice on how he can stick around.

In a company where stability at the top was once a hallmark, the last decade and a half has been tough on Procter & Gamble.

Durk Jager was named CEO in 1999 and lasted only 17 months. A.G. Lafley replaced him and led the consumer products giant until 2009. When Lafley retired, his hand-picked successor, Bob McDonald, took the top spot, but after a troubled four years, McDonald was pushed out and the P&G board reappointed Lafley as CEO.

Since then, Lafley’s mission has been stabilizing the company and finding Procter & Gamble’s next chief executive. In July, after looking at both internal and external candidates, P&G said 35-year veteran David Taylor would become CEO on Nov 1.

This is Procter & Gamble’s third CEO appointment in six years, so we asked Dan Ciampa, an expert in CEO succession and co-author of Transitions at the Top with David Dotlich, what advice he’d give Taylor in his new job.

Dear David Taylor,

Congratulations on becoming the next CEO of Procter & Gamble. As you’ve worked your way up the organization to get to this point, you’ve probably gone through what many others have—staying rather than responding to recruiters’ calls; moving for new assignments when it wasn’t best for your family, learning from some bosses, while under others knowing you could do a better job; and, all the while, keeping your eyes and ears open for ways to master the challenges that would get you promoted to something bigger. And, when you saw others promoted ahead of you, your competitive fire burned a little hotter, making you even more determined.

Of course, you’re not the only one who has a lot on the line. After going through its third CEO succession in six years (and fifth in 16 years), P&G’s board needs to get it right this time. A.G. Lafley has a lot at stake, too. He wants to pass the baton knowing the company is in the right hands so that he doesn’t have to be called back a second time to bail it out. The board depended on his judgment when it named Bob McDonald as CEO. That didn’t work out the way anyone expected. And there’ve been a lot of changes over the last couple of years leading up to the promise on P&G’s website of a slimmed-down, more focused company that grows again.

To deliver on that promise, the board has turned to you. That should make you feel proud because P&G’s directors were, no doubt, even more careful this time. The good news is that all your hard work has paid off. The bad news is that now it gets even tougher.

New CEOs run the risk of falling behind early and never getting into a rhythm of control. They often don’t read or manage the political dynamics of their new companies well enough, or may take over with an overly ambitious agenda that the organization is not ready or able to handle.

But you aren’t the only one who must avoid missteps. Many boards believe their job is done when their new CEOs take over. Rather, they must stay involved and oversee the new leaders’ early months on the job, especially monitoring the relationship between incumbent and successor. Other mistakes happen when the predecessor either leaves too soon or can’t switch from powerful decision maker to primary adviser.

In the end though, it is the new leader, the person in your spot, who has the most to lose. So what do you need to know to make sure your tenure is longer and more successful than your two predecessors whose name isn’t Lafley? For starters, here are five of the most treacherous traps you need to avoid.

Not learning from history

For someone taking over after a period of turmoil, the first trap is moving too quickly beyond events of the last few years and sending the message to “put that chapter behind us and turn a new page.” That would be especially easy to do in your case, because the last five years were not pleasant for a proud company like P&G.

But there’s much more to be gained from you leading a complete, honest discussion of what happened and why. If you do it right, the outcomes, instead of demotivating, will be a shared understanding of the current organizational character of P&G, clarity of underlying factors to be avoided, and most importantly, the clear message that you want the truth, no matter how tough it may be to hear.

Sending mixed signals

The second trap is not making the best use of A.G. Lafley as your executive chairman. This new split of responsibilities, perhaps the board’s way of being more careful this time, has the promise of leveraging the strengths you each offer. But it also offers the dangers of a two-in-a-box setup with one person more senior—in particular, mixed signals and conflicting direction.

Defining responsibilities and authority, even if done carefully, will only go so far. More important is the relationship that you two display to the organization. It can’t be based on the past when Lafley was boss and mentor. It must be clear that the two of you debate vigorously to agree on priorities, each defer to the other when needed, and are constantly aware that you can be misinterpreted.

Believing what got you here is good enough

The third trap is assuming that the ways you’ve gotten information and communicated as a manager on your rise to the top are the right ones to use now that you’re there. Being CEO is unlike any role you’ve had in your career. The most effective ones conserve time and ensure input through an information/communication system tailored to the unique demands of the job and to their particular style.

As CEO, time will be your first casualty. You will have more information to sort through, more people making demands, and less opportunity to consider things carefully. The next casualty will be discovering what’s really going on. Anything you say or don’t say will be overly interpreted, and most people will be much less blunt and open—even those allies who have done so in the past. These two casualties are common causes of failure for new leaders because they block early wins.

Not thinking from inside as well as outside

You may also assume that because you’ve been at P&G your whole career, you can accurately predict how your company will react to your leadership and priorities. Bob McDonald was a career employee, too. From press reports, he cut short his tenure by having too many priorities and misreading the organization’s capacity to change.

How can you avoid the same fate? Along with the familiarity you bring as an insider, start thinking like a new hire from outside. If you listen and learn as someone new to the company would, important strengths and weaknesses will become apparent that otherwise will remain hidden.

Not being a wise advice taker

The final trap is not knowing what advice you need and when or how to use it most wisely. You have too much experience to think you can be a great CEO without help. And you know that there are plenty of resources to tap, including within P&G and on your board. Finding the right people to listen to is the first step, but you cannot stop there.

Great leaders are also great advice takers. They have networks balanced with experts who can answer questions in each area key to the strategy, as well as listeners who are useful sounding boards for problems with no easy solutions. Above all else, every CEO needs someone who can say, “That’s a bad idea … don’t do it.” The wise leader constructs such an advice network before it’s needed and makes sure to listen carefully.

Transitions fail because traps such as these distract new leaders from the important strategic, operational, and organizational problems they must solve. There is too much at stake to allow that to happen, both for you and for P&G.

Hopefully, these comments haven’t just added to the volume of advice you’ve been subjected to but will help you have a successful run as CEO. I look forward to news of your success in leading P&G into a profitable new era.

By Dan Ciampa

Source: Fortune

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