What Law Firms Could Learn About Strategy from Procter & Gamble

The ads have changed, but the strategy hasn't!Source Google images

The ads have changed, but the strategy hasn’t!
Source Google images

AG Lafley, the recently-retired CEO of Procter & Gamble, and his consulting mentor Roger Martin have just published Playing to Win: How Strategy Really Works (HBR Press). There are important lessons for law firms.

We should listen to Lafley. He ran the biggest consumer goods company in the world with brands such as Ariel, Pampers, Olay, Gillette and doubled its size in 10 years. He also managed to increase its margins and revolutionise its approach to R&D. No easy task. He must know about strategy!

In the book he writes about six common strategy errors:

  1. The Do-It-All Strategy – not making any real choices and trying to be all things to all people
  2. The Don Quixote Strategy – attacking your strongest competitor first
  3. The Waterloo Strategy – pursuing battles on all fronts
  4. The Something-For-Everyone Strategy – trying to capture every sort of client at once
  5. The Programme-Of-The-Month Strategy – going for whatever strategy is in vogue at the time
  6. The Dreams-That-Never-Come-True Strategy – having an ambitious mission statement that never materialises into clear choices

Lafley particularly focusses on what firms need to do to increase the chances of all executives (for law firms read ‘partners’) making the right decisions. He believes there are five components of a good strategy

Five Components of a Good Strategy

1. Being really clear how to define winning. Sometimes it was winning share of business from one type of buyer, sometimes from many types.

Relevance to law firms: For many law firms, winning might be described as developing a greater reputation in the marketplace and moving up the tiers in a publication such as Legal 500. Another measure of success might be enhanced profitability.

2. Being clear what markets you are competing in. For P&G that was sometimes global dominance and sometimes local dominance.

Relevance to law firms: Compared to Procter’s, for firms with international practices, there probably hasn’t been enough emphasis on winning international, cross-jurisdictional work. Also more emphasis should probably be given to ensuring that the firm is outstanding in delivering a seamless service across offices.

3. Having a distinctive strategy to enable you to win. The first two components described above are focussed on the ‘what’ they are trying to achieve. This component is focussed on ‘how’ they were going to do it. P&G put a good deal of emphasis on implementation.

Relevance to law firms: Most practice group plans are too high level. Too little thought is given to how the strategy is going to be enacted. Then there is typically too little follow up from management, so partners don’t take the planning process seriously. This is also true of personal partner plans, which are often little more than a wish list with little alignment to the practice group plan.

4. Identifying the unique strengths the company has and playing to them. P&G takes great care to know their rivals and take appropriate actions.

Relevance to law firms: How can you ensure you have a distinctive offering if you don’t know what your rivals are offering? Also find out what your clients like and don’t like about your service. If you don’t know, just ask. They’ll be flattered to be asked and be impressed with you for asking.

5. Identifying the things that need to be managed for the strategy to succeed. What dials did they need on their dashboard? How often would they be looked at? What actions would be taken to improve performance and by whom?

Relevance to law firms: Those charged with the task of managing practice groups – not an easy role – spend too much time doing administration. Many others in the firms are better placed to do this work and are probably better at it! Instead I recommend asking each partner what support and challenge they would like to ensure they deliver on their plans. Just by checking in each month and asking how it’s going, the leader can highlight whether corrective actions need to be taken.

Overall Lessons for Law Firms

Many lawyers reading this will be struck by the words frequently used in the book such as ‘win’, dominance’ etc. P&G is totally committed to producing the best performing products, marketing/advertising them well and outselling rival products. Would law firms do better to have this kind of dedication to improving performance?

I started my career at P&G. I can still remember the effort we all put in to improving efficiency. I got a pat on the back once from the General Manager for shaving 0.01p off the cost of the packaging! I don’t see the equivalent attention to efficiency in most firms.

Is it easier to be more strategically focussed as a corporate rather than a partnership? Probably, but firms such as Clifford Chance and DLA Piper have also demonstrated a stronger commitment to growth than many other firms and this may have helped them deliver their relative successes.

Maybe firms need a bit more of a winning attitude? But is this too commercial and not really professional?

This entry was posted in Leadership and Management, Managing Change, Strategy and tagged , , , . Bookmark the permalink.

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