Procter & Gamble Chairman A.G. Lafley told the P&G board yesterday that he was stepping down as chair on Jan. 1. This is a move that came sooner than many had expected, according to the Wall Street Journal's report. It was only this past July that he had given up the CEO post.
His has been a steady and successful hand on the tiller of P&G. But it sure didn't start out that way. Here is the story he tells of his being named CEO. Talk about sudden succession. It's a tale he told in the book The Game Changer (Crown Business, 2008), co-authored with Ram Charan. Here goes:
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It came on June 6, 2000, a few minutes before a business meeting in California. On the line was John Pepper, former chairman and CEO of P&G.
John got right to the point: "Are you prepared to accept the CEO job at P&G?" I was stunned. Just the afternoon before, I had been speaking with chairman and CEO Durk Jager about our plans for the final month of the fiscal year.
"What happened to Durk?" I asked.
"He resigned."
"Why? What happened?"
"I don't have time to go into that now. I just need to know whether you're prepared to do the CEO job for P&G."
"Of course I am."
"Then get on a plane as soon as you can and come directly to my office when you arrive back in Cincinnati."
I turned to my colleagues and told them something had come up. I had to leave. On the plane, I considered this sudden and totally surprising turn of events. I tried to put first things first: What would I need to do in the next 24, 48, 72 hours? And what would I need to do in the first week, first month?
Job one was to determine the state of P&G's business. At 6 a.m. on June 7, I began digging into the numbers — business by business, region by region, customer by customer. Unfortunately, we were in worse shape than I had expected. We were 23 days from year-end and there was no way we were going to make the month, the April-June quarter, or the 1999-2000 fiscal year.
After briefing the board on Thursday, June 8, we issued another profit warning. P&G's stock opened more than $3 lower in the morning I was announced as CEO. By the end of the week P&G's stock price was down more than $7 from Monday's close. It was not exactly an early confidence booster for me.
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So, end of the new CEO story, but the beginnings of another new story — the reinvigoration of P&G. Well done, Mr. Lafley.
