Roger Martin, Dean of the Rotman School of Management in Toronto, on the power of changing the way you think.

Roger Martin: For me, the best example of a very, very large company converting from a real reliability focus that was stifling innovation, slowing their growth, is Proctor & Gamble.  

One change they made is A.G. Lafley declared that there are two moments of truth: the first moment of truth is when you as a consumer either pick a Proctor product off the shelf or not.  And then the second moment of truth is when you take it home and use it.  If it’s Olay, you put it on your skin and see whether it has the effect that you hoped it would.  So the first thing he said is, “We are too much focused on only the second moment of truth.”  That’s super important, there’s no question that if you put the Olay on your face and you don’t like its effects, you’re not going to go and pick it off the shelf the next time.  But if you’ve never picked it off the shelf because it’s hard to find, it doesn’t look good on the shelf, the retailer isn’t supporting it enough, then you’ll never get to the second moment of truth.

Now notice, is that an “or?”  We either have to win at the first moment or the second moment of truth?  No, it’s an “and”—we have to win at both of these moments of truth.

And the second thing about the consumer was taking a much more holistic view of the consumer.  The old fashioned Proctor & Gamble would say, “Okay, women . . . what do they want?”  And they go ask the women.  “Well, I want to cover my pores and I want it to make my skin more subtle.”  They would be satisfied with that.  What are your physical needs?  And if the woman said, “And by the way, I just want to make, I want to feel wanted and attractive,” the Proctor & Gamble R&D people would, “Oh, don’t talk about that, desirable, I don’t know how to do desirable.  I know how to make it more viscous so it covers your pores better, but eew, don’t talk to me about that.”

I would argue the change that was made was they really started understanding that there are a whole set of emotional, psychological needs.  How does this make me feel?  What kind of a person does this make me feel I am?  So that they were appealing more holistically to the consumer.  And that’s why, you know, circa 2000, you could buy Oil of Olay, little pink bottle, you remember that?  $3.99.  Now, you don’t buy Oil of Olay - oil went away - you buy Olay Pro-X for $50 a bottle.  

A.G. Lafley said “Anybody can do ‘or’, if you want to be the best company in your industry, you’ve got to do ‘and.’”  I think the CEO who took over in 2000 with that attitude - “Anybody can do ‘or,’ if you want to be the best in your industry, you’ve got to do ‘and’” - if you’ve got that, I think actually everything is doable.

Directed / Produced by

Jonathan Fowler & Elizabeth Rodd