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.
 


Other related articles

  • Top 5 Compensation Committee Priorities for 2022
    Published January 12, 2022
    By Eric Hoskin and Daniel Ladden
    In the second half of 2021 the market for talent at almost all levels of the organization was red hot with increased levels of turnover and challenges in attracting new staff Companies across most ind ...
  • How boards of directors can mitigate 3 pressing risks entering 2022
    Published December 15, 2021
    By John Brackett
    What boards of directors can do to mitigate risks involving cybersecurity talent recruitment and retention and compliance as the calendar flips to 2022Risks to businesses are evolving so fluidly that ...
  • RSM US Middle Market Business Index
    Published December 09, 2021
    By RSM US LLP
    A new Middle Market Business Index special report from RSM US LLP states that the growing importance of environmental social and governance ESG issues has reached an inflection point in the middle mar ...
  • A Timeline of Corporate Governance From the FCPA to ESG
    Published December 03, 2021
    By Directors and Boards
    To celebrate our 45th anniversary weve updated our Timeline of Corporate Governance which has appeared throughout the years in our pages Directors amp Boards was founded during the creation and passag ...