When Core Values Are Strategic How the Basic Values of Procter & Gamble Transformed Leadership at Fortune 500 Companies Rick Tocquigny with Andy Butcher Vice President, Publisher: Tim Moore Associate Publisher and Director of Marketing: Amy Neidlinger Executive Editor/Acquisitions Editor: Tim Moore and Mike Vaccaro Editorial Assistant: Pamela Boland Development Editor: Russ Hall Operations Specialist: Jodi Kemper Senior Marketing Manager: Julie Phifer Assistant Marketing Manager: Megan Graue Cover Designer: Chuti Prasertsith Managing Editor: Kristy Hart Project Editors: Samantha Sinkhorn and Jovana Shirley Copy Editor: Karen Gill Proofreader: Sarah Kearns Compositor: Nonie Ratcliff Manufacturing Buyer: Dan Uhrig © 2012 by P&G Alumni Network, Inc. Publishing as FT Press Upper Saddle River, New Jersey 07458 FT Press offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419, Pearson Education Singapore, Pte. Ltd. Pearson Education Asia, Ltd. Pearson Education Canada, Ltd. Pearson Educación de Mexico, S.A. de C.V. Pearson Education—Japan Pearson Education Malaysia, Pte. Ltd. Library of Congress Cataloging-in-Publication Data: Tocquigny, Rick, 1955- When core values are strategic : how the basic values of Procter & Gamble transformed leadership at Fortune 500 companies / Rick Tocquigny. p. cm. ISBN 978-0-13-290533-6 (hbk. : alk. paper) 1. Procter & Gamble Company--Management. 2. Executives--Case studies. 3. Leadership. 4. Values. 5. Customer relations. 6. Organizational effectiveness. I. Title. HD9999.S74P768 2012 658.4’012--dc23 2011038704 Contents Foreword Acknowledgments About the Authors Preface Part I Sustaining Industry Leadership Chapter 1 Core Values Can Be Strategic Chapter 2 Brad Moore Chapter 3 Jane Hoover Chapter 4 Paul Charron Chapter 5 Cynthia Round Chapter 6 John Smale Part II Applying Core Values for Capability Chapter 7 Daniela Riccardi Chapter 8 Wolfgang Berndt Chapter 9 Mike Clasper Chapter 10 Ed Rigaud Chapter 11 Jill Beraud Chapter 12 Jane J. Thompson Chapter 13 Robert A. Miller Part III Core Values and Teamwork Chapter 14 Dave Brandon Chapter 15 Brad Casper Chapter 16 Kay S. Napier Chapter 17 Cheryl Bachelder Chapter 18 Bob Viney Chapter 19 John Costello Chapter 20 Fernando Aguirre Part IV Core Values Drive Vision Chapter 21 Sam Solomon Chapter 22 Steve Case Chapter 23 Kevin Roberts Chapter 24 Jim McNerney Chapter 25 Dean Butler Chapter 26 John Pepper Part V Doing the Right Thing Chapter 27 Bob Wehling Chapter 28 Jim Hackett Chapter 29 Jose Louis Quintero Chapter 30 Samih Sherif Chapter 31 Bob Herbold Part VI Changing Lives Chapter 32 Charlotte Otto Chapter 33 Mohan C. Mohan Chapter 34 Harry Leibowitz Chapter 35 Carole Black Chapter 36 Dian Alyan Epilogue by Ed Artzt, Former CEO Appendix Foreword I served at Procter & Gamble (P&G) from 1977 to 2010—more than half my life. One of the great benefits of my tenure was being immersed in, and surrounded by, the core values and purpose of a nearly 174-year-old company. P&G’s purpose focuses externally and strategically on consumers’ needs and wants...and on brands, products, and innovation to improve consumers’ lives. The values are important because they guide our behavior with all stakeholders...and each other. R.R. Deupree, who led the company through the 1930s’ depression and through World War II, used to say that if you leave P&G’s money, its buildings, and its brands but take away its people, the business will be in real jeopardy. But if you take away the money, the buildings, and the brands, but leave the people, it will rebuild a comparable new business in as little as a decade. Mr. Deupree knew what he was talking about, because that’s what P&G people—led by purpose and guided by values—have essentially done throughout their history. As a rule, each generation of P&G people has, in fact, built the equivalent of a new business the size of the previous, existing business in about a decade. Our sales today are roughly double what they were 10 years ago, and those sales are roughly double those of the decade prior. P&G business portfolios have outperformed the market during up and down cycles alike, and we’re one of only 10 companies that have remained on Fortune’s top 50 American-based companies since the ranking began in 1955. P&G’s core purpose and values have served as the foundation for our success, generation after generation. They have allowed us to adapt quickly and strategically, which, in turn, has promoted consistent and sustainable growth. This is the fabric of our company. It is our culture. And it is, in part, why P&G is uniquely special—for its core values and for the number of world-class leaders that have come through this culture, touching and improving the lives of consumers around the world and enhancing the welfare of employees and share owners. Through the quite varied individual voices, with stories that span over five decades, you will hear how the purpose and values of P&G became a strategic point of difference for the company and other organizations these leaders went on to manage. The stories reveal the DNA of a “P&Ger”—that innate, values- driven commitment to make consumers’ lives a little bit better...every day. You will read the intriguing story of Bryce Harlow, P&G’s legendary head of Government Relations, and how he influenced Presidents Eisenhower, Kennedy, Johnson, Nixon, Ford, Reagan, and Carter. You will learn about P&G’s initiatives, such as “Live, Learn, and Thrive,” that represent P&G’s core values at work. You will hear from colleagues and friends like Charlotte Otto, who, during the 2000s, helped me restore the confidence of P&G people by reinvigorating our values and strategically leveraging P&G’s purpose. There are many inspiring stories that illustrate former Chairman and CEO Ed Artz’s observation...how amazing it was to think of all the different people who have worked for P&G, all so different, yet who have perpetuated a common standard of excellence across businesses of all kinds, across continents, across cultures, across decades. With P&G as the thread, you explore how core values can promote clarity of thought, in both professional and personal settings. It is a relevant, timely, and insightful message for students, small business owners, community leaders, corporations, and their leadership. The stories in this book celebrate the gift we were all given—core values that really work. And they show how robust focus on core values adds great enterprise value and value to your personal life. Core values at work can bring out more engagement, more fulfillment, better work-life balance, and long-term business and financial success for your organizations, yourself, and the communities in which you live and work. May you be inspired to embrace your own core values and have the courage to live by them. They will serve you well over a long and successful journey. —A.G. Lafley