What Bob McDonald Will Bring to P&G

Incoming CEO's 10 Core Beliefs Give Glimpse Into How He'll Lead Marketer

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BATAVIA, Ohio (AdAge.com) -- Procter & Gamble Co. Chairman-CEO A.G. Lafley long ago filed his core values into a manila folder titled "AGL Beliefs." They included mantras from his nine-year reign, including "the consumer is boss."

Bob McDonald
Bob McDonald
His protégé, Chief Operating Officer Robert McDonald, who will succeed Mr. Lafley as CEO July 1, also has his own list, but he keeps it on his hard drive. Given that those 10 beliefs, outlined in a talk at Cincinnati's Mercantile Library last January, are likely to shed some light on how he will reign over the world's biggest marketer, Ad Age recounts them here.

1. A life driven by a purpose is more meaningful and rewarding than meandering through life without direction.
"I was a Boy Scout," Mr. McDonald said, citing the motto: "Help other people at all times." He went to West Point and later served in the Army "because people were living behind the iron curtain. People weren't free. And I thought by being an officer in the Army, I could free those people to live more fulfilling lives. Of course, at that time, I didn't realize the thing that knocked down the Berlin Wall was the fact that the East Germans wanted the BMWs and the Levi jeans of the people on the other side of the wall." Naturally, that dovetails with P&G's "Touching Lives, Improving Life" tagline. Mr. McDonald wants to improve the lives of the 3 billion world residents not currently buying P&G products in part by selling them some.

2. Everyone wants to succeed and success is contagious.
"Do we spend our time as leaders catching the people working for us succeeding," he asked, "or do we spend our time as leaders or parents catching people failing?"

3. Putting people in the right jobs is one of the most important, if not the most important, roles of a leader.

4. Character is the most important trait of a leader.
"Character for me is putting the needs of the organization above your own needs," he said. "When I was a captain in the Army, I would always make sure my soldiers ate before I did."

He also emphasized not lying, cheating or stealing, and the need to take responsibility. "When a decision had to be made about a product like Rely [tampons made by P&G in the 1980s], even though there were no causal traces of toxic shock syndrome from Rely, P&G made a decision to take it off the market."

5. Diverse groups of people are more creative than homogenous groups of people.
"Diversity is a strategy for us at P&G, but it's really more than a strategy, it's a mandate. We were the first company in the history of the world to get a license to employ women in Saudi Arabia. And our license is No. 1, and there's not yet a No. 2. Now, in order to do that, we had to do certain things. If you're a woman in Saudi Arabia, you do not carry a passport ... because you do not have an identity. Your passport is one of the pages of your husband's passport, and there are at least three pages for three wives. So whenever one of our female employees has to go somewhere, we have to pay for a guardian to go with them."

6. Ineffective systems and cultures are a bigger barrier to achievement than the talents of people.

7. Some people in an organization just won't make it.
"Our responsibility is to help them find their dream. ... I try to maintain as much contact as I can with [P&G] people after they retire."

8. Organizations have to renew themselves.
"So we spend a lot of time training our leaders to drive change," he said. Likewise, individuals need to do the same, so Mr. McDonald always has a book in his briefcase to read on planes -- almost always nonfiction.

"I get impatient from novels, because I'm always looking for something to learn from it, something to change my life," he said. "I've read all the great novels -- 'War and Peace,' 'To Kill a Mockingbird.' And when another great one comes out, I will read it. But I'm not going to pick up some of the trash you see in airports."

9. Recruiting is a top priority, particularly in a promote-from-within company.

10. The true test of a leader isn't how the organization performs when he's leading it, [but] when he has left.
"We changed our general-manager rating system to not just one year but three years, and so we can even go back and look at an organization that a leader left two years previously."

Books that most influenced Bob McDonald
"Leader's Compass," Dennis Haley and Ed Ruggero
"The Leadership Engine," Noel Tichy
"Man's Search for Meaning," Viktor Frankl
"The Dream Manager," Matthew Kelly
"Good to Great," Jim Collins
"The West Point Way of Leadership," Col. Larry Donnithorne
"West Point Cadet Prayer Book"
"Connections," James Burke
"The Fifth Discipline," Peter Senge
"Out of the Crisis," Edwards Deming
"Leading Change," John Kotter
"The Seven Habits of Highly Effective People," Stephen Covey
"Built to Last," Jim Collins

Magazines and newspapers Bob McDonald reads regularly
The New York Times
The Wall Street Journal
The Cincinnati Enquirer
The Economist
The Week
BusinessWeek
Time
Harvard Business Review

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Dave Malaska contributed to this report.

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