A Wall Street whack for P&G's new CEO
By A.G. Lafley

Leadership second quarter 2008 45 A Wall Street whack for P&G’s new CEO From The Game Changer by A.G. Lafley and Ram Charan. Copyright 2008 by the authors. Published by Crown Business (www.crownpublishing.com). I t came on June 6, 2000, a few minutes before a busi- ness 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 ac- cept 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. “ W h a t ’ s h a p p e n e d t o Durk?” I asked. “He resigned.” “Why? What happened?” “I don’t have time to go into that now. I just need to k n ow w h e t h er yo u’re pre- pared to do the CEO job for P&G.” “Of course I am.” “ T hen ge t on a plane as soon as you can and come di- rectly to my office when you arrive back in Cincinnati.” “OK.” 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. Unfor- tunately, we were in worse shape than I suspected. 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. A.G. Lafley is chairman and CEO of Procter & Gamble Co. Ram Charan is a consultant to boards and senior management. A CEO’s apology for an offensive remark From Corporate Reputation by Leslie Gaines-Ross. Copyright 2008 by John Wiley & Sons Inc. Published by John Wiley & Sons (www.wiley.com). H enry Paulson Jr., former chairman and CEO of Goldman Sachs Group, demonstrated how a prop- erly issued and frank apology from the top can help repair a personal and company reputation. During a question-and-answer session at a Salomon Smith Barney conference in January 2003, Paulson seemed to imply that between 80 and 85 percent of Goldman Sachs’ employ- ees were irrelevant to the company’s success. “I don’t want Ed Note: Excerpts printed with permision of the publishers. All rights reserved. Book it: Best bets for board reading From a roundup of new books, leadership insights on sudden succession, human capital oversight, being a trusted adviser, greatness in the making, and how to apologize for a tactless remark.

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