Game Changer

I was skimming through a copy of Game Changer authored by A.G. Lafley (my former Chairman and CEO of Procter and Gamble) and Ram Charan. During my career at P&G, I was blessed with several visionary leaders to learn from – John Smale (1981-1990), Ed Artz (1990-1995), John Pepper (1995-1999), Durk Jager (1999-2000), A.G. Lafley (2000-2009) and Bob McDonald (2009-present).  I learned a lot about effective business management and people leadership. Each was remarkable in their own right, and they all shared the common belief that success meant touching lives and improving life. Consequently, whenever I feel the need to get re-grounded in the important aspects of business, I have a habit of skimming through their books, their speeches, and my memories of their lessons. Game Changer is one of those books with common sense insight into how to lead a company to success. While the book focuses on explaining how to leverage innovation as a catalyst for P&L growth, it has a number of principles that can help you deliver even better results from your economic development efforts. I picked it up recently for inspiration in how to make a meaningful difference in the face of budget limitations. Here are the principles I found most relevant for reapplication. I hope you find them interesting and thought provoking as well.

  1. The CEO is Boss.  Okay, A.G. actually says the customer is boss, but in the world of capital investment that is more often than not, the company CEO. Your goal should be to ensure CEOs in your target industries understand your community’s promise and the asset package that supports it. You need to be certain the image CEOs have of your community is consistent with reality. Misperceptions need to be eliminated or you will find that your community is left off the short list of locations for consideration. I continue to be surprised at how most community promotion is focused on site selection consultants. This target audience of decision influencers is certainly important, but they are also focused on the rational side of the decision (facts and figures) which reflects only the “ticket to entry” and often do not represent the emotional basis for differentiation and final decision. It is important to remember, at the end of the day, the site selection consultant’s job is to provide the CEO with the information to make an informed decision. Net, the CEO is the site selection consultant’s boss as well. The more you focus on understanding and communicating what the CEO needs to know about your location the more effective your promotional program will be.  And, site selection consultants will actually be grateful that you are providing them with relevant information to share with their “boss”. Take a quick look at your promotional efforts and determine if you have the CEO as the focus of the communication. If you decide you don’t, then meet with a few CEOs from companies in your community and ask for their insight on what changes would be important to make. The more relevant you can make your messaging on a limited budget, the more effective you can be.
  2. Where to Play, How to Win. These are two simple strategic questions that are so important to answer any yet so difficult to get alignment on. The biggest issue is the answers require you to make a choice. “My economic development efforts will focus on attracting, retaining and expanding capital from these select industries and not these.” It is the “not” word that creates so much debate. Part of the problem is executives and support groups included in the “not” category feel slighted and left out, so they push back on the choice. One of the keys to success is to restate the position – “My limited economic development promotional dollars will be preferentially focused on attracting, retaining and expanding capital from these select industries over the next 24 months.” “Not” industries in your community provide tax revenue and represent job creation potential. They should be valued. The problem is you have a limited promotional budget and must make a choice on where to invest it for the greatest potential return. Make certain the executives in your “not” industries feel the love or you may find them leaving your community. Don’t alienate them with the way you communicate your promotional investment choices.Different from Where to Play, How to win, means making a select number of specific choices on how to differentiate your community within the target industries you plan to play.  The hardest thing in making these choices is being objective.  You need to understand the image your community has in the minds of the CEOs in those industries. Often, this includes misperceptions that need to be addressed. Or, it may be a complete lack of awareness regarding your asset package. In either case, your promotional efforts must talk to the CEO and not to yourself. That means explaining what the benefits they will derive in selecting your location. Stop talking features and start talking benefits.
  3. Leverage What You Do Best. It is okay if your community is not the best choice for a company.  No location is the right solution for every potential capital investor. Yet, we feel bad when an RFP is rejected or we didn’t get an opportunity to even compete for a specific deal. Sometimes a rejection is actually the best outcome. Particularly, if an acceptance would create a major distraction because the company needs are not aligned with your community strengths. The core paradigm in economic development needs to shift from a landlord-tenant relationship to a real partnership where you can easily see both the business and community growing stronger together. The easiest way to do this by attracting investment that leverages the strengths of your community, and by investing to make your strengths even stronger. Think in terms of Jim Collin’s hedgehog concept. Stay focused on what your community has passion for, can be great at and can build an economy around. Do this and your economic development will move from “good to great”. Do this, and your community will be a true business partner versus a landlord.
  4. Optimize by Building Enabling Structures. One learning from my career is that systems are perfectly designed to produce the results you get. If you are getting mediocre results, then your system needs attention (or you could reset your expectation so mediocre is acceptable). A model I have always found useful when working “on” the system has been the Galbraith Star. It is an organizational development model to help you understand the driving and restraining forces that conspire to produce consistent results. Armed with that insight, the next step is to optimize the system to produce competitively superior results. You do this by creating processes, programs, assets and policy change aligned to the desired outcome. When you’ve successfully answered the “Where to Play and How to Win” questions, you are in a position to evaluate your systems and determine if they are sufficiently robust to deliver the results you seek.  If not, then optimize.
  5. Manage Risk. I want to contrast managing risk from eliminating risk. On the road to breakthrough results you will have to deal with risk, there is no way around it. That means you need to get good at identifying and quantifying it. The fact is all change entails risk. Equally true is most people and organizations don’t understand how to manage risk effectively. And yet, it is one of the skills that often separates winners from the losers. Risk management is a process and with a little practice can be learned and applied to your economic development decisions. Effective risk management allows you to make purposeful choices that help you change your community so it can continually be seen as relevant, competitive and authentic. It also helps build confidence in the strategic direction you select to help create jobs and prosperity. Getting good at managing risk allows you to change faster and more dramatically, creating a competitive advantage that is difficult for other locations to duplicate. How much risk is your community taking? Is it enough to facilitate change so your community can be competitive in today’s interdependent global economy?
  6. Be Courageous and Connected. Being courageous is all about your willingness to continually challenge the status quo in a productive way. It is about being open to purposefully destroy what appears to be working in order to invent an even more effective path to greater success. It doesn’t mean being foolish or cost inefficient though. It speaks to making choices that are thought through. It means not being caught up in analysis paralysis waiting for that last piece of data that tells you exactly what to do. In my experience it also means accepting the principle of Occam’s Razor – the best course forward is the one built upon the fewest assumptions or the choice based on the set of assumptions with the lowest expected variance. The principle is often expressed (actually incorrectly) as “the simplest solution is generally the best solution”. In my experience, reapplication in economic development means recognizing that systems and processes that have historically worked well, may have become unnecessarily complicated (14th century Franciscan friar William of Ockham’s notion of plurality without necessity). If you strip a system or process back to the original intent underpinning the design, it gets easier to identify the root cause of any current failure. Take legislation for an example. If you understand the purpose of the original legislation by stripping away all subsequently legislated exceptions you can begin to understand why it no longer meets the needs of today’s economic reality.  In these cases, yet another a bandaid is probably not the best solution because you’ll be pushing the original execution well beyond the designer’s intent.  It would be better to reassess and create a new simplified solution. Remember, if your operation gets too complicated the chances of getting a manageable solution are slim. On the other hand, if you are in touch with what is really happening in your community, you are always in a good position to design a simple solution that has a high probability of success. The challenge isn’t so much identifying what is right to do, as it is unraveling the years of politics that add “plurality without necessity”. Net, strip out the complexity and keep it simple if you want to increase your probability of success.

If you get a chance to read Game Changer, please do so. There is a lot of wisdom in the book that I left out of the above discussion. I know you’ll enjoy it. Hopefully my take on the reapplication of the principles is helpful as you think through how you are going to do more with less. I also know the conversation on Occam’s Razor may be a bit self-indulgent. But, my undergraduate degree is in theoretical mathematics and old habits die hard. To those of you who did read it, thank you for your perseverance.

Do you have personal examples of any of the 6 principles at work in your community? Or, do you have thoughts on how you might reapply any of the principles to do more with less budget? If you do, please share your thoughts as a comment. Your willingness to add personal perspective to the discussion will help everybody get a better educational experience from reading the post. I appreciate your participation and look forward to your thoughts.

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1 Comment so far

  1. Todd Sebastian

    September 11, 2010

    Great thoughts, Ed. Thanks for sharing.

    #2, in particular, resonates strongly with me, as a key part of my consulting practice involves helping small-to-midsize companies develop brand strategies. Much like you, I sum up “strategy” in one word: “choice.” And I sum up “brand” with one word: “promise.” Therefore, a brand strategy is a conscious choice (with accompanying sacrifices) on what promise your brand intends to make — and thus what it will hopefully stand for in the hearts and minds of brand prospects.

    While this may sound simple enough, in practice it is quite challenging. Brand stewards, who are (and should be) so close to and passionate about their brands, simply struggle with making choices and sacrifices. But I push them to do so. If you try to be all things to all people, you end up being nothing to no one.

    As an aside, I love your last line: “Stop talking features and start talking benefits.” I had a colleague at P&G that always said, “Features tell. Benefits sell.” How true.

    Thanks, again, for sharing.

    Have a blessed day.

One Response to “Game Changer”




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