A.G. Lafley’s decision to step down as CEO of Procter & Gamble earlier than anticipated pushed the company’s stock price down a few pennies yesterday, but as of this writing, it’s trending back up. The incremental ups and downs reflect a larger tension. For the most part, observers think that the maker of Pampers, Tide, and Crest is well-positioned to move on without Lafley. On the other hand, the question nagging at everyone is, Why now?
Credit P&G and Lafley for smart succession planning. Heir apparent Robert McDonald is a 29-year P&G veteran who has worked closely with Lafley for years, and appears to share Lafley’s vision for the future. They’re especially in synch on stepped-up efforts in emerging markets like India and Brazil.
Though the board hasn’t officially voted him in, nobody appears terribly surprised at the choice, and reports of his abilities have been generally quite positive.
Still, eyebrows are being elevated over the timing of Lafley’s departure. He’s only 62 years old. And he’s leaving McDonald with something of a mess. In the current recession, consumers have increasingly turned to private label products to save at the cash register, meaning they’re turning away from P&G.
I don’t think Lafley’s quitting because he can’t face the economic crisis. He took over a mess of his own when he was promoted to CEO in 2000. The company was in a serious downward spiral. Share price had plummeted, analysts were pessimistic, the media was scathing, and employees were disgusted. He’s the first to admit that he felt like a “deer in the headlights,” facing the media on that fateful day, as he wrote in his May HBR article.
He engineered a remarkable turnaround then; he presided over a rise in shareholder value of about 87 percent during his tenure. There’s no reason to think he couldn’t do it again.
He is also the most focused person I have ever met. I had the privilege editing his HBR article; we met for more than four hours in his elegantly appointed Northern Kentucky condo, right across the river from P&G’s Cincinnati headquarters. Despite the myriad demands on his time, he didn’t get up from the table once, other than to offer me some Pringles.
I know that Lafley plans to stay on as Chairman and it sounds like he plans to stay pretty closely involved with the business. But maybe there comes a point in your life when you just don’t need the money. And you don’t need another crisis. He can say that he’s been there and done that, and he’s still relatively young.
He’s an outstanding leader. Maybe now A.G. Lafley just wants a life.