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Corporate Staying Power, Procter & Gamble Style
by Dennis F. Haley

Want your company to be around in a hundred years or more? Bob McDonald of 166-year-old Procter & Gamble says values-based leadership will take you there... and a book co-authored by consultant Dennis Haley can help.

Cincinnati, OH (May 2004)-Although the recent rash of scandals makes it hard to see silver linings, all news from Corporate America is not bad. There are companies that have done things right from Day One and have the track record to prove it. Procter & Gamble is a good example. It has been around for 166 years now and it's still going strong. In fact, despite the tremendous growth and change the corporation has experienced over the years, it has maintained a strong, steady position in the financial world for more than half a century.

"There's an interesting article in a recent issue of Fortune that compares the Fortune 500 of 1955 with the one of today," relays Bob McDonald, Procter & Gamble's President of Global Fabric and Home Care. "Procter & Gamble ranks 28 today. In 1955, we ranked 27. Many of the companies on the 1955 list no longer exist or no longer exist in the form they did then."

"That kind of consistency reveals a company that knows who it is," he adds. "It reveals a very strong set of values. But more than that, it reveals a commitment to leadership. I'm proud to say that the people who have led Procter & Gamble for so many years have made sure that our values are not just hollow words displayed on the wall or posted on the website, but are actually lived out every day."

For the past several years, McDonald has been involved in the training of Procter & Gamble's general managers. This task affords him the opportunity to push his long-held philosophy that personal values and leadership are intricately connected-and that a base of leaders with strong personal values is key to standing the test of time.

How can your company have the staying power of a Procter & Gamble? McDonald offers the following tips:

• Realize that individual values count (not just corporate ones). "It's true that leaders need to adhere to corporate values," he explains. "But leadership means more than just toeing the company line. I always start my talks to leaders by saying, 'You basically have a choice. You can live your life driven by a moral code, by a set of values. Or you can meander through life and, maybe when you're on your deathbed, you'll say, I wish I had done more with my life. I wish I had had more guideposts.' I think a company that impresses upon its leaders the importance of knowing and expressing your values is a company with staying power."
  
  
• Have all leaders write a personal leadership philosophy (PLP). McDonald says he has long been a proponent of having leaders write down their values. "A personal leadership philosophy helps leaders really think about what they believe in," he explains. "And writing down your beliefs keeps you honest. It also makes your expectations crystal clear to subordinates. People want leaders they can predict. They want to know, up front, what's valued and what's not. That's what the PLP does for you."
  
  
• Inspire your team with the benefits of a PLP. When McDonald took on the task of training P&G's general managers, he needed a good way to get team members to buy into the PLP concept. It was then that he discovered The Leader's Compass: Set Your Course For Leadership Success (Academy Leadership Publishing, 2003, ISBN: 0-9727323-0-6, $14.95), co-authored by Dennis Haley and Ed Ruggero-a book that teaches the art of writing a personal leadership philosophy.
  
  McDonald had known and liked Ruggero for several years. Furthermore, he was attracted to the consulting firm Ruggero worked for, Academy Leadership, which was founded by co-author Dennis Haley. The firm uses leadership principles taught at West Point and the Naval Academy to help develop leaders who achieve powerful business goals. A West Point graduate himself, McDonald appreciated the benefits of military leadership. He read the book, liked it, and started giving it out to the men and women he trained.
  
  "I found The Leader's Compass to be a good way to help people get in touch with the idea of the personal leadership philosophy," says McDonald. "Number one, it's short. Number two, it's written in story format so it's not your typical business how-to book. It's entertaining as well as instructive." (Editor, See attached tipsheet for more on writing a personal leadership philosophy.)
  
  
• Make your corporate values part of your corporate culture. It should go without saying that a leader's personal values must be compatible with corporate values. This requires that the corporation make its values clear to every employee at every opportunity. Post your values on the wall in the conference room, sure, but don't stop there. Hammer them home in training sessions, in meetings, in casual conversations. In this way, your values become part of the corporate culture. They can't be lost.
  
  "Procter & Gamble has always been a very values-centered company, though we didn't have a 'formal' values statement until about 1984," explains McDonald. "Everyone who works here knows what our values are, and people are attracted to our company because of these values. If you ask Procter & Gamble people why they came to this company, they'll say it's one, values, and two, people. Of course, those two are inextricably linked."
  
  
• Remind everyone that doing the right thing is profitable. McDonald makes it a point to frequently reinforce to colleagues and employees that prosperity naturally flows from adhering to a strong set of values. "We recently hit a 52-week high in stock value," he explains. "In the 24 years I've been here, we've split our stock four times. A share when I joined the company was about $50. Now you would have 12 shares for every one you had and they're worth $107 each now. An investment of $50 would now be about $1200. That's not bad."
  
  
• Make sure employees feel that they're working for something bigger than money. "It's this simple: people want to work in a place where they can do what's right and not worry about the consequences," says McDonald. "Whether it's having to recall a product from the marketplace or how we took care of the people in Japan after the Kobe earthquake in 1995, we've tried to follow that principle. Our statement of purpose is about making consumers' lives better. We all really take that seriously. That attitude elevates your job from just a job or a paycheck to something more important."
  
  
• Whenever possible, promote from within... "Promoting from within can create a very strong culture, particularly in a large corporation," McDonald points out. "It helps prevent disconnect. There's also a lot of history in this company. It goes back to the founding fathers and their values, the quality of the goods they made. They would not scrimp on quality. These things become legacies in organizations. It's all tied together."
  
  
• ... Yet keep things fresh by bringing in outside ideas. Although creating a strong company culture is desirable in many ways, it's not without its inherent challenges. "It's easy to become too insular," says McDonald. "It's never a good idea to get too cut off from the outside world. We combat that problem by bringing in outside speakers, by infusing ourselves with the ideas of consulting firms like Academy Leadership, by having our leaders serve on boards of other companies. Do whatever it takes to prevent staleness or tunnel vision."
  
  
• Consider how your decisions will affect your corporate descendants 100 years from now. "Our job as business leaders is a tremendous responsibility," says McDonald. "I get butterflies when I consider how I, during my stewardship with this great company, can strengthen it in such a way that it exists 100 years from now. If I could offer one piece of advice for keeping a company strong over the long haul it would be this: make your decisions based on long-term thinking and not temporary pragmatism, with the knowledge that if you do that over time, your company will sustain itself."
  
  

As for co-author Dennis Haley, who Bob depends on to guide his people in writing their personal leadership philosophy-well, he is proud to be associated with a corporation that has endured for more than a century and a half.

"Procter & Gamble epitomizes what leadership can create," says Haley. "When I think of this corporation, I picture the torch of leadership being passed from person to person, generation to generation, century to century. Working for a 'legacy corporation' is the equivalent of working on the ancient cathedrals you knew wouldn't be completed until after your death. It's a powerful image, and I think it's a beautiful one . . . perhaps one of the best things we're capable of, not just as businesspeople, but as human beings."