Strategy as Winning – A.G. Lafley:

By the time of my election to CEO in 2000, most of P&G’s businesses were missing their goals, many by a wide margin. The company was overinvested and overextended. It was not winning with those who mattered most—consumers and customers. When I visited all our top retailers in my first thirty days on the job, I found that P&G was their biggest supplier but nowhere near their best supplier. Consumers were abandoning P&G, as evidenced by declining trial rates and market share on most of our leading brands. I was

determined to get P&G’s strategy right. To me, right meant that P&G would focus on

achievable ways to win with the consumers who mattered the most and against the very

best competition. It meant leaders would make real strategic choices (identifying what they would do and not do, where they would play and not play, and how specifically they would create competitive advantage to win). And it meant that leaders at all levels of the company would become capable strategists as well as capable operators. I was going to teach strategy until P&G was excellent at it. I wanted my team to understand that strategy is disciplined thinking that requires tough choices and is all about winning. Grow or grow faster is not a strategy. Build market share is not a strategy. Ten percent or greater earnings-per-share growth is not a strategy. Beat XYZ competitor is not a strategy. A strategy is a coordinated and integrated set of where-to-play, how-to-win, core capability, and management system choices that uniquely meet a consumer’s needs, thereby creating competitive advantage and superior value for a business. Strategy is a way to win—and nothing less.

Even when I ran my bar I followed the same policy. A lot of customers came to the bar. If one out of ten enjoyed the place and said he’d come again, that was enough. If one out of ten was a repeat customer, then the business would survive. To put it the other way, it didn’t matter if nine out of ten didn’t like my bar. This realization lifted a weight off my shoulders.

Habit 4: Think Win/Win - Principles of Interpersonal Leadership

“As with many, many problems between people in business, family, and other relationships, the problem in this company was the result of a flawed paradigm. The president was trying to get the fruits of cooperation from a paradigm of competition. And when it didn’t work, he wanted a technique, a program, a quick fix antidote to make his people cooperate. But you can’t change the fruit without changing the root. Working on the attitudes and behaviors would have been hacking at the leaves. So we focused instead on producing personal and organizational excellence in an entirely different way by developing information and reward systems which reinforced the value of cooperation.

With No Deal as an option, you can honestly say, “I only want to go for Win/Win. I want to win, and I want you to win. I wouldn’t want to get my way and have you not feel good about it, because downstream it would eventually surface and create a withdrawal. On the other hand, I don’t think you would feel good if you got your way and I gave in. So let’s work for a Win/Win. Let’s really hammer it out. And if we can’t find it, then let’s agree that we won’t make a deal at all. It would be better not to deal than to live with a decision that wasn’t right for us both. Then maybe another time we might be able to get together.

But what if that kind of relationship isn’t there? What if you have to work out an agreement with someone who hasn’t even heard of Win/Win and is deeply scripted in Win/Lose or some other philosophy? Dealing with Win/Lose is the real test of Win/Win. Rarely is Win/Win easily achieved in any circumstance. Deep issues and fundamental differences have to be dealt with. But it is much easier when both parties are aware of and committed to it and where there is a high Emotional Bank Account in the relationship. When you’re dealing with a person who is coming from a paradigm of Win/Lose, the relationship is still the key. The place to focus is on your Circle of Influence. You make deposits into the Emotional Bank Account through genuine courtesy, respect, and appreciation for that person and for the other point of view. You stay longer in the communication process. You listen more, you listen in greater depth. You express yourself with greater courage. You aren’t reactive. You go deeper inside yourself for strength of character to be proactive. You keep hammering it out until the other person begins to realize that you genuinely want the resolution to be a real win for both of you. That very process is a tremendous deposit in the Emotional Bank Account. And the stronger you are—the more genuine your character, the higher your level of proactivity, the more committed you really are to Win/Win—the more powerful your influence will be with that other person. This is the real test of interpersonal leadership. It goes beyond transactional leadership into transformational leadership, transforming the individuals involved as well as the relationship. Because Win/Win is a principle people can validate in their own lives, you will be able to bring most people to a realization that they will win more of what they want by going for what you both want. But there will be a few who are so deeply embedded in the Win/Lose mentality that they just won’t think Win/Win. So remember that No Deal is always an option. Or you may occasionally choose to go for the low form of Win/Win—compromise. It’s important to realize that not all decisions need to be Win/Win, even when the Emotional Bank Account is high. Again, the key is the relationship. If you and I worked together, for example, and you were to come to me and say, “Stephen, I know you won’t like this decision. I don’t have time to explain it to you, let alone get you involved. There’s a good possibility you’ll think it’s wrong. But will you support it?” If you had a positive Emotional Bank Account with me, of course I’d support it. I’d hope you were right and I was wrong. I’d work to make your decision work. But if the Emotional Bank Account weren’t there, and if I were reactive, I wouldn’t really support it. I might say I would to your face, but behind your back I wouldn’t be very enthusiastic. I wouldn’t make the investment necessary to make it succeed. “It didn’t work,” I’d say. “So what do you want me to do now?” If I were overreactive, I might even torpedo your decision and do what I could to make sure others did too. Or I might become “maliciously obedient” and do exactly and only what you tell me to do, accepting no responsibility for results.