On the 11th floor of Procter & Gamble’s Cincinnati office, AG Lafley has just rolled up the sleeves of his open-necked blue shirt and is standing at the windows of his “huddle room”, hoisting up the metal blinds to let the sunshine in before he settles down for lunch.
The food, covered by the kind of metal lids I last remember seeing in my school canteen, is laid out on the table in his modest meeting room. There is no linen, fancy silverware or waiting staff. There is no bottle of wine resting on the table or even water in a jug.
Despite the simple spread, Lafley is rubbing his hands in anticipation. “What have we got?” he ponders cheerfully as he lifts the lid to reveal a small serving of chicken and spinach salad with goat’s cheese crumbled on top and mustard dressing on the side.
Lafley was, of course, asked out for lunch. But as chief executive of the world’s biggest consumer goods company, he doesn’t have time to step down from his glass tower – he doesn’t have an office as such, having gone open-plan some time in the early noughties – and indulge in a leisurely meal at one of Cincinnati’s plentiful steakhouses.
“I would normally have lunch in 10 or 15 minutes,” he says. He pours the water his assistant brought him while I open my can of Diet Coke. “This would be two lunches for me,” he adds waving his fork between his salad plate and a colourful bowl of fruit salad. I look at my food, amazed that two meals for him would make up the starter and dessert of just one of mine. Then Lafley waves away the bread rolls. “I had bread last night,” he explains.
“I actually had a very American meal last night,” he smiles as he talks about a restaurant outing with new partner Diane the evening before. “I had a steak and it was great. I had a nice split of Pouilly-Fuissé and then I shared a split of Cabernet with the steak, a little salad, a little steak, no dessert,” he enthuses in his slightly nasal New England twang as I mournfully spear some spinach. “I felt really good about my dinner because Diane and I went for the run [before] and she always kicks my tail. My partner is a very committed exerciser and she likes running more than I do, so I often run with her.”
Alan George (everyone calls him AG) Lafley is 61 years old. Sitting next to him, I decide he looks at least 10 years younger than he is. He still manages a five-mile run in about 45 minutes. He exercises five or six times a week and remains very trim, a habit he has stuck to devotedly in an effort to fight the corporate fat that can creep up in his type of job. As the chief executive of the maker of Pampers, Pantene and Ariel he spends “two-thirds” of his life on the road or in the sky.
He and Diane live in a penthouse downtown. He divorced his wife Margaret last year and he doesn’t really want to go into it. “I was married for 35 years. And today I am very hopeful that I am going to get a call very shortly and I will have a second grandchild. It is very exciting.” (His grandchild was born later that day – a boy).
While his long marriage ran its course, his 32-year love affair with P&G lives on. In his eight years at the helm, he has turned it from a bloated and bureaucratic business back into an American icon.
He tells the story of how he did this in his new book The Game-Changer, which he wrote with consultant Ram Charan. Cut through the management-speak and the key to success is simple: observe people going about their daily lives, identify their unmet needs and come up with new products.
They are the sorts of things you wouldn’t necessarily think you wanted – sanitary pads with wings, washing powder for cold water, toothpaste that whitens your teeth – but these inventions have turned P&G from a $40bn company in 2000 to one that sells over $80bn of products. Some 3.5bn people, more than half the world’s population, use a P&G product every day.
I am quite enjoying chatting to him about his eating habits but think I should turn to his book. So, as Lafley absently lifts the red onion out of his salad and drops it into the upturned metal cover, I tell him how some of the stories in the book remind me of the texts I read when I briefly studied social anthropology.
I pick on the instance when P&G tried to kick-start its stagnant laundry market in Mexico by studying low-income women’s daily washing rituals. “That is a great metaphor!” he exclaims when I describe him as a commercial anthropologist. “I have probably seen every kind of consumer research known to man or woman over 32 years. I have sat with my legs in the water of a rural village in China talking with an interpreter to an older woman and her daughter doing her laundry in the river.
“I have probably done laundry in 25 countries. I was in [P&G’s] laundry business for 16 years ... It is like being a social anthropologist ... We should use that one Paul [he turns to his adviser who is sitting in on the lunch], I’m serious.”
“Social or commercial?” I counter. “You’re right, we are not doing it for an academic reason, there is in the end a commercial reason, but we deeply believe that if we don’t do anything to really improve life then we don’t deserve to reap the commercial rewards.”
P&G’s unbroken sales and profit growth under Lafley has brought great rewards to his investors and to him. He was paid $23.5m last year, with $6.6m in cash, and he holds a huge amount in P&G stock. Yet there are no discernible trappings of wealth on his person or hint of hubris in his demeanour. He wears sensible Ecco shoes, rimless spectacles and a simple watch, the face sitting on his inner wrist. There are no flashy cufflinks or expensive shirts with his initials embroidered on the breast. He deals with compliments without being self-deprecating or conceited.
“That is who I am,” Lafley responds when I say he is incredibly understated given his position as one of America’s most celebrated businessmen. “I am a product of my family and education.”
His father started out as a union negotiator, ending his career as a high-flyer working for David Rockefeller as head of human resources at Chase Manhattan Bank. In the intervening years he worked for General Electric, dragging his family around the country as he took on a string of different jobs for the company. Lafley, with his three younger sisters, had to learn to fit into lots of different schools and places.
He once described himself as a “GE brat” but the way he sketches his mother and father suggests he was born into a modest, hardworking family rather than one that popped a silver spoon in his mouth.
“My father was the first person in his family that went to college. They were very small-town people, and they weren’t destitute. My mother’s father was a lineman and a fireman; he strung wire for the telephone company, climbing poles and stringing up wire and drove fire-trucks for volunteer firemen and my father’s father was a foreman in a manufacturing mill, a textile mill, so he was the factory boss.”
As he lays his fork down to take a breather from the salad that he is still only halfway through, he recounts his early years. Having completed high school in Chicago, Lafley went to Paris for a year to study. He started out as a mathematics major and finished up with a full scholarship to do a PhD in medieval and Renaissance history.
A near academic, Lafley’s direction changed with the Vietnam draft. He enlisted with the navy in 1970 and ended up as a supply officer. “My mother was in the navy in the second world war and she said the one thing about the navy is that it is small and collegiate and they have the best food,” he says.
When he returned from war he ditched the PhD and funded himself through Harvard Business School, joining P&G aged 30 in 1977. “[My father] was happy as could be. He couldn’t understand why anybody would want to learn a foreign language.” He then worked his way up through P&G’s laundry business and became head of the global beauty care division and the Asia unit before taking the top slot.
His “dyed-in-the-wool Democrat” mother died four years ago but lived long enough to see him make chief executive. His father, whom he tries to visit every month, still follows the markets and his son’s career closely. “I am going to see him [this weekend] and believe me on Saturday night when we sit down to dinner he will have some advice for me on what we are not doing well,” he is laughing.
While he doesn’t always take his Dad’s advice seriously, he clearly finds comfort in those trips home.
“It is extremely lonely [being a chief executive],” says Lafley as I decide I cannot eat at his pace and polish off the mouthful of salad I have been politely pushing around the plate.
“One of the problems the politicians have is because all their professional colleagues end up being their friends because that is who they see all the time and they are all lobbying for something, because everyone wants something, right? The one thing I can do, and it is a huge advantage of being here, is get on a bicycle and ride up a road and nobody knows who I am,” he says as he picks up his fork and stabs again at his salad.
But surely Lafley is a bit of a celebrity in Cincinnati? This is small-town America with a big-time corporate organisation. His divorce made the local paper.
“There are lots of places where no one knows who I am. You’ll get a kick out of this. I hate to go out New Year’s eve, that is when all the amateurs are drinking, right? So we are sitting around and Diane says, ‘Do you want to go out?’
“So we call up and we get a table for two at the last minute. And we don’t have to dress up, so I am in jeans and a long sleeve T-shirt and a very unstructured blazer-like jacket and we are halfway through the meal and the waiter looks and me and says, ‘Gee, you know you look an awful lot like that Lafley guy over at P&G,’ and Diane says – he puts on a slightly feminine voice – ‘He does but he is a lot different from that guy, and we just laughed and that was just one mile from here.”
But the arrival of Diane on the scene, coupled with his decision to write a book (the how-I-did-it memoir is normally done after retirement) has set tongues wagging that Lafley is getting ready to quit, especially since retirement age for P&G is 65 at most. “I am not going out,” he says. “I love this business, I am not going anywhere, that would be crazy.”
As he gets ready to leave, I ask him whether he is worried that the global financial crisis could end up disrupting his enviable track record, just as he nears his decade at the helm. “We will come out of this, everyone will come out of this. We will grow, just not as fast.”
And then he goes back to the product. “You know we just introduced the most revolutionary product in feminine hygiene in arguably two decades. It is called Always Infinity – I don’t know if it is in the UK yet [it isn’t] – it is far and away the best protection, far and away the best absorbency and it is totally new design, totally new materials and it will sell for a modest premium but, per [sanitary] pad, per period, it is going to be far and away the best deal.”
“Why do we always end talking about tampons and sanitary towels?” I say, thinking about a conversation we had about Tampax last June (he was making a point about women’s shopping habits in a downturn). “I’m sorry about that but at least you finished your lunch,” he says and bursts out laughing.
He, however, still has a good few mouthfuls left despite having been sitting with the salad for one hour and 22 minutes. That is exactly 22 minutes over my time slot and I can see his assistant hovering outside, gesturing at him. “I have to take that phone call, OK,” and he gets up to leave.
But you haven’t even finished the lunch! “I know, I’ll come back and finish it,” he says as he shakes my hand and makes his way back to his desk. I make my way down from the 11th floor and wander out into the Cincinnati sunshine, in search of a cup of coffee and a little more lunch.
Elizabeth Rigby is the FT’s consumer industries editor
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Procter & Gamble global headquarters
Cincinatti, Ohio
2 x chicken and spinach salad with goat’s cheese, and mustard dressing
2 x fruit salad
1 x water
1 x Diet Coke
