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Soap maker’s secret for innovation: 4 C’s and an O

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in Leaders & Managers,Profiles in Leadership

To get a mature business innovating again, treat customers (not yourself) as the boss, says former Procter & Gamble chief A.G. Lafley.

After taking over in 2000 as chief executive, Lafley pursued innovation as a customer-driven process of product development that was consistent, replicable and predictable. His two biggest hits before stepping down in 2010 were Swiffer and Febreze, category changers that made surface cleaning and odor removal easier.

Result: Between 2000 and 2007, Lafley tripled profits.

Here’s his formula—he calls it “four C’s and an O”—for creating an innovative culture:

Openness. Lafley considers this the most important. If your mind is closed, you can’t even start talking with customers. Openness is the beginning of the innovation process.

Connectedness. Next, maintain contact between employees and customers throughout a structured process. Reassure employees by keeping your core culture and products the same, but change everything else.

Collaboration. Once you’ve connected everybody, the collaborative process begins. Lafley calls it an “all for one, one for all” proposition.

Curiosity. P&G has found a high correlation between employees who are curious about a lot of things and those who innovate freely.

Courage. Uncertainty is the name of the game, especially in the soap business, Lafley says, where up to 85% of new products fail. You’ve simply got to have a stomach for risk. His answer: Fail quickly and cheaply so you can move on.

—Adapted from The Game-Changer, A.G. Lafley and Ram Charan, Crown Business.

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