A.G. Lafley, Coming and Going

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.

Norm Augustine Takes the Stage

Congratulations to Norm Augustine on receiving the B. Kenneth West Lifetime Achievement Award at a big dinner in Washington D.C. this evening. The award, presented by the National Association of Corporate Directors at the organization's annual conference, is "in recognition of his remarkable career and his dedication to the improvement of corporate governance practices."

Norm, the retired chairman and CEO of Lockheed Martin Corp., is a cherished colleague of both the NACD and Directors & Boards. He is a board member of the NACD and a member of the editorial advisory board for Directors & Boards. What better places from which to exert the considerable force of his intellect and personality to advance the best practices of board governance? I've had the pleasure to publish several articles Norm has written for Directors & Boards over the past two decades, and each one has been a gem — chock full of wisdom on corporate life and leadership.

Several of Norm's peers lauded his personal qualities and professional accomplishments at tonight's awards dinner. Procter & Gamble Chairman A.G. Lafley, for one, said, "Boards look to Norm for wise counsel and outstanding judgment." Is there any higher tribute that could be paid?

But when it comes to Norm Augustine, special mention is always made of his sense of humor. It comes through in his writing and speaking and, as his peers made sure to mention at the awards presentation, in his board interactions. (He is, by his own count, a veteran of 500-plus board meetings of Fortune 100 companies.) His acceptance speech anecdotes generated hearty guffaws in the crowded ballroom of the Omni Sheraton. Like this assertion that was once told to him: "The best sight is seeing the back end of a bus full of directors leaving town."

One of the biggest laughs came earlier in the day, when Norm was on a panel discussing the topic of the board's role in corporate strategy. Asked to talk about one of his worst war stories related to the topic, he gamely told of his board involvement with an unfortunate organization that faced this situation: "The CEO didn't believe he needed a strategic plan..." Pause. "...and proceeded to implement it."

Lifetime achievement awards, while marvelous to receive, come with a tinge of finality. Recipients are rightfully ambivalent about being recognized with such an honor. So while we extend our congratulations to someone who has considerably brightened boardrooms — and our pages — with his brilliance, I'm sure my NACD colleagues join me in a follow-on wish that Norm Augustine's wisdom and wit reign powerfully for years to come.