"The Brand Expert"
"I think the differentiator for companies will be how they activate and execute their Purpose over time."
Jim Stengel has unlocked creativity throughout his career. As a brand manager and then Global Marketing Officer at P&G, as a founder of his own consultancy and as a thought leader, author and teacher. He has been described as the 'Dean of Purpose' and a 'CMO Consigliere'.
Jim talks to me about how Purpose became part of his professional and personal life, what he has learned about unlocking creativity at scale and about the one thing a leader must do above all else.
- Humanity and generosity of spirit
- Relentless curiosity for the next question
- Willingness to take the time to bring rigor to each exploration
"FEARLESS CREATIVE LEADERSHIP" PODCAST - TRANSCRIPT
Episode 8: Jim Stengel
Charles: Hello, you're listening to Fearless, where we explore the art and science of leading creativity, an unpredictable, amorphous, and invaluable resource critical to every modern business. Each week, we talk to leaders of the world's most disruptive companies, how they're jumping into the fire, crossing the chasm, and blowing up the status quo. Leaders who have mastered the art of turning the impossible into the profitable. So, stay tuned, because in the next half hour, anything could happen.
I first met Jim Stengel in November of 2008. Barack Obama had just been elected president and Jim had just left his job as the global marketing officer for P&G. We were attending the Conscious Capitalism conference, a gathering of people who believe that building better companies, more valuable and impactful companies, meant paying attention to all the stakeholders. Employees, customers, and suppliers, as well as shareholders. Over two days, there were a lot of presentations supporting this proposition, showing that not only was a company's financial performance significantly improved, but so were things like employee retention and engagement. But what interested me most was a presentation that Jim gave, in which he talked about how at the heart of all this was a company's driving force, the reason that a company existed, it's purpose with a capital P. I had never heard anyone verbalize this before, but instantly, I got that feeling when someone shines a light on something that has been part of your own journey, but that you had never noticed was there.
Chris, my wife, and I had built a global film editing company on what seemed to us like instinct and common sense. But at the heart of that, unrecognized by me, and therefore unspoken until now, had been a purpose. That night after Jim's presentation, I spent some time thinking about what had allowed us to create such a powerful and connected business across multiple offices and continents. What had aligned a group of people with disparate views, with fragile egos and insecurities? It was that we were all trying to do the same thing. We were committed to building a company that connected talent with opportunity, regardless of geography. We were building a company with a purpose.
That purpose let us make many big and complicated decisions with relative ease. It informed how we hired, who we promoted, and the technology platforms we invested in and built ourselves. That purpose had been everywhere. I just hadn't seen it before.
Recently, it has become unfashionable to talk about purpose. People describe it with an air of boredom. "Oh, not that again," they sigh. Which surprises me. Purpose is the life force of a company, its literal and metaphorical heartbeat. To me, being bored with purpose is like deciding we should stop talking about and investing in cardiology as an area of medical expertise, because it's boring or confusing, or just old fashioned.
Purpose, in my experience, matters. A lot. It separates the temporarily good from the sustainably great. It is a lasting competitive advantage. In the long run, perhaps it matters more than anything else. Perhaps this boredom with purpose is because it's hard to define. Because so many companies have been built without one that the surgery required to implant purpose so that the organism of the organization accepts it, is too powerful or expensive, or both.
Over the last few years, as Jim and I have gotten to know each other, I've studied his thinking around purpose. Challenged him on it sometimes. And I've learned from it. I've applied it to my own work and I've come to believe that purpose is critical not only to the organization, but to its leaders. That the very best leaders have a personal purpose that allows them to make better choices, to overcome the fear and anxiety that holds others back. More on that in a future episode.
I sat down with Jim recently to talk about his own journey, about what it takes to unlock creativity for a company as big as P&G and about what he's learned about happiness along the way.
Charles: Jim, good morning and thanks for being here. Actually, I don't know if I should say, "Good morning." Podcasting is weird, right? Because there's a whole time shift. Who knows when someone's listening to this? Anyway, good morning.
Jim Stengel: Just say, "Hello."
Charles: Yes, exactly. Thanks for being here.
Jim Stengel: Absolutely.
Charles: So when I first started thinking about doing this, I put together a small, five-minute introduction piece around the podcast to explain why I wanted to spend the time doing this and what I felt people would find helpful. The "why," I guess, to use language that's common to both of us is that I think there's never been a more important time to unlock creativity in business. I think that leading that process is really challenging. I think it's either misunderstood or not understood at all. So, my hope is in having these conversations, to bring some insight and clarity to how you do that.
You've unlocked creativity throughout your own career in multiple ways. You've done it as a leader of brands, as a leader of your own consultancy and think tank, you've done it as a thought leader. Which one has unlocked your creativity most, do you think?
Jim Stengel: I think this recent part of my career, Charles, has done that. I was 25 years at P&G and before that I worked for Time, Inc. and I did business school in between and I had a fabulous run at P&G. Lots of different countries and brands and categories. Learned a heck of a lot. But I think leaving Procter & Gamble after 25 years and just starting clean with, I actually didn't have a business plan, I didn't have a team, I didn't have a budget. I left a company of $85 billion with $15 billion plus in marketing spend to nothing. The only thing I really had was a sense of, I guess, purpose or mission that I thought business could be run in a very different way. Whether you call that purpose-led, purpose-inspired, mission-driven, higher order, and I experienced at P&G what that looked like and felt like. I experienced in some companies I visited what that looked and felt like and I said, why aren't more people working that way?
I had a little mission that I wrote in the middle of a piece of paper. Then I started to put bubbles around it on things that could come ... I should do to bring it to life. Just general things, like teaching, writing, meeting interesting people, consulting, just to keep my hands in the messiness of everyday business. This stuff is easier said than done. I just found that it was so intoxicating to have the freedom to pursue what I loved. Anytime you're in a big role in a big company, it's hard to spend nearly 100% of your time on something you're passionate about, which I think unleashes your creativity. Because there's just stuff that comes up. People stuff and so on and so forth.
So, I jumped into a life where I had the freedom to pursue whatever I wanted to do and I just think my learning curve has been crazy steep. The rewards in it, human rewards, have been remarkable. Before I left P&G, I made the rounds, so I wasn't sure what I wanted to do. A counselor told me that you should go have lunch or dinner with people whose lifestyle you admire. So I did that with a bunch of people and those conversations were so ... and it wasn't public, yet, I was leaving P&G. Those conversations were so remarkable, but I went to see Maurice Levy and we had dinner in Paris. He's a man I respect tremendously. He's a very wise person. Maurice just sat back after I explained what I was thinking about and he said, "The greatest gift in life is your freedom. And you've earned that, so go do it. Go enjoy yourself. Go have fun. Go pursue what you love." And that's what I did. It's been eight and a half years now, and it's been remarkable.
It's funny, Charles, when I am out and about with clients and speaking and doing seminars and teaching and all of the things we do, people want to talk about that. So, I'm thinking that could be an interesting third book. Because I don't go in to talk about that because I just thought that's a personal decision I made, but everyone wants to talk about, "How'd you make that decision? Did you do it too early or too late? What has it been like? How did you do it? What do you miss? What do you not miss?" And so, the conversation goes on for 30, 40, 50, 60 minutes. So I'm thinking about maybe I should do a small piece about my thought process.
It was actually ... I got counseling for it, just to kind of make my feelings more explicit. And at that point I was at the peak of my career, personal equity was very high. Leaving P&G after we had had a great run, so was that time to be a CEO? Was that time to do something really more traditional, but big? Or was it ... and so I made the unexpected choice. And there were temptations. There were some crazy offers that came in. Fun offers. But my kids thought, "Dad, are you crazy?" But if I didn't do it then, when would I do it?
Charles: Somebody once said to me that wealth is disposable time, which I thought was really powerful and actually really ... because of what you're saying, I've certainly found that in my own evolution and this notion of self-discovery and jumping into the next thing because you know that you can do what you're currently doing and let's see what else we're capable of. What have you learned about yourself since you made this change?
Jim Stengel: I think I'm more self-aware about my creativity. I think when you're in a large company, as I was, that gets muddled and I don't think I was always self-aware enough about when I was burned out, when I was flat, when I was dull, when I was cranky. I'm much more self-aware about that now. I spoke to a group last night at the Hall of Fame program, over at R/GA that the AMA sponsored. I was inducted with a few other amazing ... a few amazing people.
Charles: Congratulations, by the way.
Jim Stengel: Thank you, thank you.
Charles: Not a small achievement.
Jim Stengel: But I shared with them in the acceptance that I think the key to happiness is to live a life of health, joy, and resilience. I have more focus on my fitness now than I did when I was at P&G, because I just think it keeps me creative. It keeps me fresh. It keeps my mind in a different place. So, I have my rituals now to stay fresh and creative. To stay alert. I do things that give me joy, because that also takes your brain, I think, to a different place. And I don't get hung up on failures, on ... you need to be resilient. Life is full of bumps. So, I think I'm more self-aware, and I think I'm more ... I take a lot more downtime. I don't know if I'd even formalize it and call it meditation, just thinking, sitting still, running through my mind what's happened this month. What might happen next month. Just thinking about it.
I felt like ... my wife says to me, I'm probably working more hours in a week than I did at P&G, and I worked a lot of hours at P&G, but she said, "You're just never tired. You're just always sort of on it." I think that's been more self-awareness about my being, my creativity, my whole-mindedness.
Charles: It's interesting, isn't it? Because I think doing this kind of work and there's some overlap in terms of what you and did, the notion or the ability to be present becomes much stronger. I'm sure you see this, too, but when I'm talking to people, working with people who are mired in the day to day of running a big corporation, as you were saying earlier, their ability to be present is very limited. They've got literally triple-booked on the calendar, they're late for everything, their calendars consume them. It's tough to watch sometimes, actually, and you feel like trying to find a way to get through to them and say, "This is your life, not just your business, and the choices you're making are causing this."
As you deal with people who are stuck inside the day to day of those kinds of businesses, and you look at them through the lens of your own experience, how do you help them come to this kind of consciousness? What can you tell them that makes a difference to them?
Jim Stengel: I do something very simple and we have recently done this with a senior person and it's something all of us can do and it's just so blood simple. Take apart your calendar for the last 12 months. Do big data analysis on your calendar. Just tear it apart. And figure out or just put the activities into buckets. After you've done that, you've cleaned it up and made sense of it, then pull in a few people who care about you and who are close to you. So it might be your executive assistant, it might be a few direct reports, it might be a partner or spouse. Spend half a day, that's all it takes.
But here's what I learned from taking my calendar apart. Could you help me reconstruct my priorities, my focus, my time, to open up 50% of my time.
Charles: How much percentage?
Jim Stengel: 50.
Charles: Five oh.
Jim Stengel: Five oh. To work on more future-oriented things, spending more time with what's around the corner, spending more time with your people, spending more time on your health. I've done that with myself. I've done that with several leaders and it always works.
What happens, actually, when you do that, you realize, I'm involved in many things I don't need to be involved in. I'm not trusting my people enough to do what they do well. I say yes too much. I don't have an agenda. I react to other people's agendas. And all that surfaces and then you do something about it and it's very renewing and it's very confidence-building.
Charles: That is such an interesting point. I was going to talk about this later on, but actually, it's a perfect segue to talk about this now. I came across a relatively old Harvard Business Review from 2009 in which A.G. Lafley, the man who appointed you as global marketing officer of P&G, wrote an article titled, "What Only the CEO Can Do." I don't know if you ...
Jim Stengel: Yeah, I remember this. Yeah.
Charles: It was fascinating to me. He talks about bringing Peter Drucker in, I think, early on and having a group of people around and talking about what is the role of the CEO. Instinctively, for a long time, I have talked to leaders about the notion of doing the things that only you can do. Look at the world, look at the company through the lens of "What do I bring to the table that nobody else can do?" In part that's because of position and part that's because of skill set. One of the things that I see all the time is leaders, because they're human, don't understand the thing that they are uniquely capable of. You see people completely mis-underestimating their strengths over and over and over again. Because it's easy for them, because it comes naturally to them, they decide, you know what? Everybody else can do that so I'm going to worry about the thing I'm not that great at because I should be capable at everything.
So this notion of what only the CEO can do is really, really, really powerful, really resonant for me. And I think that it takes leadership into the right place. So this process you're describing I think is very powerful, because you start to think about yourself in a more valuable way, which at the end of the day is really important both from a self-development standpoint and from a leadership standpoint.
When you look back at your ...starting with your P&G career, I think, what was it that you realized that only you could do? That you needed to focus on in order to help that company make the enormous shift that it undertook during your tenure and during A.G. Lafley's tenure?
Jim Stengel: When A.G. appointed me CMO, just as an example of what you just talked about, he said to me, "We are the largest advertiser in the world. We're the most famous marketer in the world." This was back in 2001. So, he said a lot of people want to come to me for agency decisions, spending decisions, mix decisions. He said, "I don't want any part of that. That's your job. And when they come into my office, I will bounce them back." So, very clear lines, very clear choice. He knew he had to spend time on company strategy, core competencies, his leadership, the board, managing a public company, and that's what he focused on. So, he did walk the talk in that concept.
So, when I came in, actually I had a long talk with A.G. before he offered me the job about where I would focus. So, it's all about that, right? And really, we had a mind meld about, this company has very strong leaders and they run their businesses really well. So I shouldn't be involved in that. I shouldn't be overseeing that, or the marketing spend or whatever it might be. They're good at that. So, what can I do? I can look horizontally at this company and figure out what two or three things could I do that would effect every brand and raise the level of capability and competency and prepare us for the future.
A.G. also said to me, "You know, there's only a handful of people in this company of 140,000," at the time, "who are thinking about the future. Most people are operating and you're one of them." So, the choices that I made with my team, I didn't do this alone, I did this with my global team, about one area we needed to work was how do we be a much more risk-taking, creative, innovative culture? Which was not P&G's strength at that time. And what does that look like? Feel like? What different work do we need to do? What different rewards do we need? What different rituals do we need? Do we need some different partners to push us forward? And if that clicked and we got traction on that, everybody would win.
One of the most poignant things that someone said to me as I was leaving P&G was Andrew Robertson, at BBDO, and he said to me, as he shook my hand, "Jim, you were in every room when you weren't in the room."
Charles: What a compliment.
Jim Stengel: Oh, just huge. So that really touched ... but that says that, when you change the culture, the smell of the place, if you will, as someone once said, and different things are rewarded and you give air cover to people to take a chance, to take a risk, to be a bit bolder. That affects everyone. So, that's certainly one choice we made that would affect ... and the other, this was maybe a subset of that, we just said, "We're going to tackle what is the work of marketing at P&G. Have we gotten bit complacent on that? What do people do? What would we like them to do?" And we actually did some analysis of how people were spending their time and it wasn't where we wanted them to spend their time. So, that resulted in a multi-year effort to shift the work of the function. To focus much more on consumer understanding and insights, on true innovation, on communications planning, on design, on creativity, on human development versus a lot of administrative stuff that could have been done elsewhere at a lower cost with people who were better at that.
That's another big change we made, so just to examine ... but those were areas that I thought ... versus going in and poking at the Pampers team or the Tide team, to say, "Is your advertising good enough?" Or, "Is that special pack you just did working?"
Charles: So, being bolder sounds instinctively right. I imagine that in a company as complex and as large as P&G, one that is as bottom-line oriented as a company of that size has to be, that's not straightforward. The emotional side, the human side of having that happen is staggering. How did you get people to be bolder?
Jim Stengel: Everyone wants to go there. Really, most human beings want to make an impact and want to do something significant, especially when you have the caliber of people that a P&G or a Google or an IBM or a GE or any of these great, legacy companies have. Really, you have to start with the leadership and the business case for it. Because if you develop some slogans, posters, be bolder, be faster, be more decisive, think bigger, watch some videos of Steve Jobs, you know. It's all nice.
Charles: It's depressing, isn't it, to walk into companies and see those posters by the elevator and you go, oh really? Please not that again.
Jim Stengel: Yeah, right, yeah. So, it was about, why is this important? Are we happy with the level of boldness and innovation and creativity in the company? So, some of it's good old fashioned data gathering. Employee sensing, employee discussions. I'm not talking about the [pulse service 00:23:23], I mean engaging them about how they feel about their work and what they could be doing. So, it was relatively easy to make the business case back then, because our innovation success rate was not good. Our communication with consumers was pretty boring. We had a low percentage of our brands growing market share. We were not creating the categories that we wanted to create. And our employee base was kind of down. So, there's the business case.
Then, I just think getting out more is something more leaders need to do, right? We get stuck in our rabbit holes and our companies, and so as part of this process, I personally took my team to visit companies we admire. Then I eventually commissioned a quant study with Millward Brown at the time, Millward Brown Optimor, to look at brands that were growing much faster than us in creating financial value and consumer bonding, if you will. So, they did a global study on that. I gave them about six months and then brought them into our management team to say, "What did you learn? And what are the potential implications of that on P&G's culture?"
Charles: Did they look across all categories?
Jim Stengel: Yep. I wanted it to be very expansive. They came back with insights about leadership and decision-making, structure, how to think about experiences ... the consumer, before that was fashionable to talk about. And it actually resulted in several fairly remarkable changes at P&G, which are still there.
Charles: Such as?
Jim Stengel: Putting a leader above each franchise with true clout, versus having eight leaders around the world, who kind of coordinate things but you end up having a brand that moves slowly and doesn't take advantage of opportunity, so this idea of single point accountability and speed and keeping that person in place longer, having a more intuitive sense of the business. That's still a concept there. And then the agency concept of having an agency team with one leader, one set of goals, one compensation scheme. Which is just, frankly, good practice. They put that into place, too. We put that into place.
Charles: Was there a lot of dotted line reporting?
Jim Stengel: There was dotted line and I would say there was ... even though we had moved to a global structure on each brand, with global profit accountability with one person, the regions were still somewhat running on their own. Of course, you don't want to lose that local innovation, but you want someone to be shepherding it, directing it, thinking about it, pulling that team together. And P&G, we took our game up in that area.
Charles: I see dotted line reporting structures and it inevitably becomes an encumbrance. I think it's an inevitability for a complex organization, but I think that's one of those things that companies have to work harder at figuring out how to minimize the ambiguity.
Jim Stengel: Here in 2017, one of the most frequent questions we get in my little consultancy is, how to do global, local, regional. Still. Everyone is still wrestling with it and I think the reason they're wrestling with it is it's never going to be ... if you go all the way regional, or all the way global, those are not good solutions. So you do, as you say, need to have some sort of dotted line collaboration. The trick is in getting the people in there who's chemistry is good, who communicate well, who work together really well, who have the same vision for the business, where it should be going. Have the same sense of purpose, who understand the brand in a similar way, and who just spend a lot of time together. I mean, that's the answer. I don't care what's on paper. Those are the global teams that thrive.
Charles: I think that's so true. In a very small way, a very, very, very small way when we built a film editing company that had offices in four different locations around the world. When we first put the fourth piece together, we had this, what quickly became obvious to me was becoming three-dimensional chess. Everything you did had multiple consequences in terms of how you move people. But, in the first few months, I had people running the production side of each of those offices and they would all call me every day complaining about each other. "They don't understand. We've got it worse here. The clients in LA are harder than in London," or whatever it was. And after a while I thought, I'm just not going to listen to this anymore. And it's not manageable. I can't keep plugging my finger in the dike and they're not going to listen to me anyway.
So I job-swapped them for two weeks and just said, "You go and run that office. You run this office." And they all went off and had to deal with the local realities and they came back and never complained again, because they realized there were ups and downs. And I think to your point, this notion of creating human connection and human understanding is always more powerful than any organizational charts. The old chart goes out the window when it becomes personal and human.
Jim Stengel: That's right.
Charles: And I think companies have to invest more in that. If you just take somebody who's working the local level and stick them in the global center for a week and have them understand, oh. That's why they keep saying no to me. It changes everything I think.
So, was this Millwood Brown study the beginning of your identification of purpose? Is that where this notion of that sort of idea's come from? Where did your consciousness around purpose come from?
Jim Stengel: I think it subconsciously started a long time ago, probably even before I came to P&G and certainly, my early experiences in P&G, which were the best ones, if you deconstruct them now, we were operating with a strong sense of purpose. Even going back to when I was a very young brand manager on Jif peanut butter, I had an incredibly diverse team. I'm still friends with them. There was a guy that came out of manufacturing. There was a woman that came out of sales. There was a woman who came out of business school, who's father had been at IBM. There was another woman who was Korean-American, one was African-American. I mean, for the early to mid-80s, a really diverse team. And we spent a lot of time together and we had fun together and we liked each other personally and we said, "Yeah, of course we're selling peanut butter and it's a staple with young children, young mothers." So, we said, "Let's spend a lot of time with the magazine editors who know these people well. Let's spend more time with these moms. Just see if there's more we can do."
Many things came out of that. A sense of they were nervous about their child's nutrition. They were very nervous about their children's schools at the time. So, to make a long story short, it developed a different brand meaning for us and a brand purpose, if you will. We weren't using that language at the time. So, we said, well how can we make a bigger impact in the lives of these mothers and children and how can we be sure that's connected to our brand? So, one thing we did out of that ... and this was before, god, we had the data we have now ... we did a program where every jar of peanut butter that was purchased, I forget if it was a nickel or a dime, but it was some not insignificant piece per jar, that went to the local PTA of the consumer's choosing.
So, to set that system up in the mid-80s, was no small piece of work.
Jim Stengel: Yeah, of course.
Charles: Pre-every kind of ...
Jim Stengel: Absolutely. So we had mail addresses, things like that, you know?
Charles: Yep. Back in the day.
Jim Stengel: Yeah and it was a national program and we piloted it to be sure we could do it. It had a material impact on the brand equity and the market share. Because moms were saying, "Well, they care about what I care about. They make a great product. I trust it." So, it gave us a different dimension. We really appealed to her values and she saw that we were listening. We cared.
So, certainly that was a long time ago. I think that sense of business I took to further assignments, certainly when I went into Eastern Europe, I thought our entire company had a mission, to help business be done in a different way, a transparent way in Eastern Europe in these emerging economies. A very pivotal assignment I had was when it was my last line management assignment before becoming global marketing officer, which was Pampers in the late 90s. I was asked to do that and to run the category for EMIA. So I was part of the global category team and the brand was in rough shape and it was about $2.5 billion brand then, still P&G's largest, but doing terribly. The innovation pipeline was dry, no differentiation, demoralized employees.
We were losing to all the major competitors and a sense of purpose on that brand, really created by a team that just was tired of losing and wanted to make a bigger impact with mothers and babies, got together and I gave them air cover. I became a supporter of theirs. They shifted the brand and frankly, even the category, by reorienting our behaviors to be much more about helping mothers and fathers with their babies' physical, psychological, and social development. That was our aspiration. At the time we started, it seems ludicrous. We were making a diaper. But we adopted much more of a service mentality and it affected, even in the early days, the website, our relationship marketing programs, our hospital programs, our outreach, and it inspired employees. It led to different partnerships, a very famous one with UNICEF, and now the brand is $10 billion plus. Differentiated, emotional, continuing to do innovative things, and this is 15 years later. So, they basically more than tripled their size, much better margins. Great place to work and a real sense of meaning for the people who work there.
I carried all of that into the CMO job. So, i already had a bit of the ... and I think one reason A.G. chose me was the Pampers experience, which he loved and he wanted more brands to be thinking that way. So I think one reason I was chosen was to help scale that thinking, which again, we talked earlier about, what can you uniquely do that others can't? I could become the advocate, the vocal advocate for this different way of thinking about our brands and behaving that way. Because Pampers had momentum, people were admiring it, it did become a little bit of a benchmark for the company.
Then, a few years into that, I thought, well, maybe we're getting ... we're now successful, we're growing. 7% of our brands are growing share. Maybe it's time to reboot again. So that's when we did the external study.
Charles: So you and I first met days after you left P&G, at Conscious Capitalism, which was the first time I had ever heard anybody talking about purpose. Since then, I've heard people describe you as the dean of purpose, the CEO of purpose, I mean purpose is very much central to your philosophy, as you've already talked about today. You've written a book about it. I'm curious, at Cannes last year, there was a growing meme around, we've talked about purpose enough. Let's talk about something else. We've done that. And I hadn't been aware that purpose was a fashion thing, that you could just discard it after a while, because we'd already done that. I'm assuming you don't see purpose that way, that we can't just decide we've spent a lot of time discussing when I was in industry, it's okay. We can talk about something else instead.
Purpose is fundamental, right? How would you describe it? Mission, vision?
Jim Stengel: I believe it's as fundamental as innovation, right? Have we said innovation is old and tired? Maybe the word is but certainly not the process and the results of it. So, I feel that everyone ... I mean, it's been a wave, right? Everyone is talking it. Journalists are writing about it. There are more books about it. I think the differentiator for companies will be how they activate and execute it over time, with consistency and coherence. And that is hard. There are still frontiers in this area. What are the measurements for it? What is the hard link with financial results? What's the hard link with talent recruitment and retention? What is a company of purpose? What is the ... I was having a discussion about this with Fast Company. It would be an interesting thing to tackle.
What is the ... I hate to use "score card" but what are the KPIs for purpose? We have some of them but is it shared, is it published, is it validated? So, I think there's still lots more to learn. As I think about other ways of doing business, other models, other frameworks, I don't frankly know what plan B is. I think if we think about all businesses that have been successful over time, whatever language they used, purpose or mission or meaning. This is what they were about. I continue to look at the brands and businesses we all admire for their results. They are businesses that are acting on their purpose and they take it seriously. It's how they run business. It's not a marketing thing. It's not a corp communication thing.
So, you take, CVS continues, right? They took a bold stand, a symbolic act a couple of years ago on smoking. Can they continue it? The results are just fine. You look at LEGO. Maybe a bit easier because it's a private company, but they just are relentless about making a difference with children and their play and learning and development.
Charles: And people don't recognize how close to falling apart that company was relatively recently.
Jim Stengel: Of course, yes, right.
Charles: It was a big turn around from an economic standpoint.
Jim Stengel: And if you ask the CEO how they came back, it was this. I was listening to Paul Polman, who's a friend on Cramer last night, on CNBC, and they got into talking about the Kraft Heinz Unilever thing and Paul basically said ... everyone's writing about it today ... "Our returns have been better than Warren's over the last eight years in these businesses."
Charles: Pretty good reference point.
Jim Stengel: Yeah, absolutely. And Paul has been all about understanding Unilever's background, its heritage, its meaning, its history. And he has had a good run and it's a tough category now. Consumer products and how everything is shifting in terms of habits, channels, so on and so forth. But Paul believes in this and he acts on it.
Charles: I wonder whether the fact that some people are interested in shifting the conversation away from purpose is to your point. Because it's difficult. It's hard-
Jim Stengel: It's a different kind of leadership.
Charles: Yeah, it really is. It requires a longer term view, I think. It requires looking at the heart and soul of the business, not just the bottom line. You have to believe that there are things that have to get done in order to improve the bottom line. There's a certain amount of faith, I think, is required from that standpoint. I also think, you had just mentioned this and I see this a lot as well, that the act of defining purpose is tough and then the act of actually socializing it and having people internally understand it, and also bringing it out into the world, all of those things are very difficult to do. There's no straight line for any of that. So you've really got to decide that this is important to you. Otherwise, don't both because it's going to bite back until you get there.
Jim Stengel: And you have to be very inclusive and you have to socialize it a lot. Certainly it's true today, because of just how people are working and communicating. But I think it's always been true. If it's something handed down from above, it will fall flat. People will be cynical. They weren't part of it. So, that kind of leadership, to set direction, be decisive, but include people, is tricky. And very few people get that balance right. So I do think it is a different leadership. I don't think it's the kind of stuff we learn in business school. I think in many people, they don't learn it early in their career. I think it's through role models that we have and trial and error on our own part, and I've had a long career, so I've had lots of trial and error. I've seen lots of leaders and have had lots of role models. You sort of develop your sense of what works for you and what's right and what works. The leaders I've admired most, they do, in their own way, have a very deep sense of purpose.
Charles: And a relative lack of personal ego, I think, when it comes ... they're not looking to do this because it's self-aggrandizing.
Jim Stengel: Absolutely not.
Charles: They're doing this because it's the right thing for the business and the people that work there.
Jim Stengel: Yeah. There's a great story in this month's Harvard Business Review about shareholder value. It's written by two Harvard professors. I commend you to read, I commend everyone who's listening to read it. They basically take a strong stance about how shareholder value has taken us to a very bad place and other people have written about it. Roger Martin has. This is a particularly lucid article about where it's taken us and what some other choices could be. It's obviously not written about purpose. It's written about shareholder value versus sustaining the enterprise and the kinds of things managers need to do to keep the company vital. But really well done, very thoughtful. I recommend you read it.
Charles: I'll take a look. It's a reference point that is both over-played and under-played, I think. The shareholder price is obviously a conversation that comes up quickly, but shareholder value is in many ways, more ... has more dimensions to it than that. And I think, especially, from a sustainable standpoint.
When you look at brands who are building sustainable value, what do you see today? What does a modern brand look like that's a successful modern brand?
Jim Stengel: Well, I think it starts with what impact they're trying to make with the people they serve and the planet and the people that work on the brand. I think it's a brand with tremendous energy. It's a brand with courage and a point of view. It's a brand that is humble, learning always, curious. Never arrogant. Restless. And I think that a brand that has advocates, people who will stand up for them, that will give them permission to fail.
It's a bit of an old example, but when Starbucks had its ill-fated thing on race, trying to get the baristas to talk about obviously a very relevant topic, but doing it in a way that was difficult for them to do while doing their job. And it bungled and they stopped it and everyone was fine with it. Their intent was good. So, it had no material impact on their customers, on the brand. But it's a good example when a brand has the right intent and hits all the things we've been talking about. They can stumble, because we're all human. We get that.
I think the reason United had so much trouble with their recent bungle is I don't think people were clear about their intent. And actually, the company is going to be way better because of that. But it's too bad it took that catastrophe.
Charles: Well, the airline industry has done a pretty spectacular job of making us feel like they don't really care about us or whatever.
Jim Stengel: Yeah, but I fly Delta a lot and I actually think that they try and generally they do a really nice job. There is an energy and a care and a concern from their people that I don't find at most other airlines. There are exceptions, of course. But I think in a difficult industry, they communicate with me a lot, they're real, they're honest, and their intentions are good. And the leadership is, I think, behind it.
Charles: Yeah, it always starts with that, doesn't it?
Jim Stengel: Yep.
Charles: It really does. You've managed a lot of different advertising agencies over the course of your career. I'm interested to know, how do you unlock the creativity of an ad agency? They all walk in the door proclaiming to be creative and we both know that some are extremely and some are much less so. What do you look for and how did you go about unlocking it?
Jim Stengel: Well, I have a pretty good reputation with agencies over my career and I think it starts with including them. So, not treating them like a vendor who has an assignment, but a business partner who understands what you're trying to do holistically, for the entire brand. Where you're trying to take the brand or the company. So, if they understand your problems, your frustrations, your challenges, your opportunities, they will be way more committed to helping. A great agency is a creative problem solver. So if they understand the problem better, they'll be able to help you with more creative solutions. So, I think one is to bring them in. Be inclusive, be open, be honest.
Charles: How early would you bring them in?
Jim Stengel: In terms of those questions, well, if I make a commitment that they're going to be part of the team, I'd bring them in very early and I would trust them to respect the information, right? There was a time, way back when P&G didn't give agencies much data about the business and obviously that's changed. They pretty much get almost everything now. So that's the first. Make sure they understand you and your business.
I think the second is to give them a great brief. You want them to really be thinking very, very, very big. And so, your expectations should be very high for them. Then, when they come back, you need to participate in that. So if they bring something back that is pretty scary, that's what you asked for. So, give them some rope.
There's a great leader who was the woman running Old Spice, back in the early days when they started to do that amazing creative work that everyone loves around the world now. But it was our early days with Wieden+Kennedy. We didn't know them that well. They didn't know us. And she came into my office and she said, I have no idea what to make of this. This is so bizarre. This is so different from anything we do. And I'm not even sure how to share this with my boss. And it was the first work out of Wieden+Kennedy. So I said to her, "You just have to go with them. Just trust them. What do you have to lose? You have everything to gain? So trust that they know what they're doing. That this is the right first step for this brand and get behind them. And I'll go with you to your boss if you need me to."
And that began what became all that remarkable creative work that grew the brand, won awards, got the organization energized and actually is still going on today.
So, I think having very high standards for them, including them, and then ... most agencies that a company like P&G would work with are pretty good. So I think it's just a matter of un-tapping that. I always said to them, "I want to be your favorite client. Not because I'm big. So, what does it look like to be your favorite client?" And part of that is human stuff, too. Getting to know people on a human basis. Spending time with them and caring about them. So, I think most of the teams that I worked with over my career, we tried to get that spirit. Which isn't really different from your own team. The team I have now, my consultancy, we care about each other. We're friends. We trust each other. We hold each other to higher standards. We share things. We enjoy being together and I think we do remarkable work partly because of that.
Charles: Where did that come from in your background? That human component, there's a lot of compassion, there's a lot of faith in the way that you describe your leadership style, an enormous amount of humanity. I'm curious, you've always struck me as somebody who moves very comfortably with people who have a lot of influence, and a lot of people don't move that comfortably. You don't seem intimidated or off-put by any situation that I've ever seen you in. Where did you get that confidence from? Where did this humanity come from?
Jim Stengel: Well, that's a good question. I'm not sure I've thought about that. I guess it all goes back to our childhood, right? It always does. I grew up in a big family and I was one of six kids. We lived in a small house in an urban environment. Small city but it was an urban environment. I had a posse of friends in the street and we were out all the time, trying different things, getting in trouble, being mischievous, nothing serious. But just being mischievous. And I think that esprit de corps and that camaraderie with that group of friends, who I'm still friends with, by the way, many, many decades later, we still get together once a year and rekindle things. I think that gave me confidence to be adventurous. I had parents who had a lot of trust in us as children. I think also, my mother, back when I was young and I didn't want to go near this, I was a sports guy. I liked team sports, I played basketball, football, and I think there was some confidence that came out of that. I was captain of my team in high school and we had quite a force.
When I was in eighth grade, seventh grade, self-conscious, I wanted to be with my gang. She said, "You need to take speech. You need to do public speaking. It will be important for your career." So I had these nuns wrangling me after school and putting me into a room and giving me an extemporaneous topic and having me just go. Then, of course, taking me apart. But, she was right, because public speaking is like writing, right? It's thinking. It's practice in thinking. So, I think that was part of it.
Charles: Did she see something in you that made her believe that this would be something you needed ...
Jim Stengel: Well, she wanted my brother to do it as well and my sisters, and so ... I think they've all ... my brother's a federal judge now, so he did okay with it. So, I just think she felt it was important for whatever career you go into. So, I think that was probably part of it and I think my father was very accepting, my mother was very accepting. We weren't intimidated by anyone. My dad was not a showboater. He was a sincere, authentic ... he was a lawyer, a country lawyer. He fought in the war and came back, on the GI bill, went to Penn law school and became a country lawyer. So he spent his time with farmers and just helping people out and I think he inculcated that value along with my mother, with all the kids. So it partly came from that. And we never took ourselves that seriously. We tried to achieve and all that, but we always had a sense of humor and a sense of what's really important in life.
Charles: What are you afraid of?
Jim Stengel: I don't like to let people down. Maybe that's why I'm in the work I'm in. It's not an ego thing, it's not a money thing. It's just if someone is trusting me with helping them with something, I want them to feel like it was a remarkable experience for them. So, that's ... just letting someone down is to me, I don't sleep well if I do that. So I try never to do that. Of course, we're not perfect, but ... I guess that's what I'm afraid of at this point. Not much else.
Charles: What does the future look like?
Jim Stengel: You know, Charles, I want to continue to do things that are fulfilling, that bring meaning, and that bring joy. So, I'm talking a lot with my wife about how we spend our time and one thing with our children, older now and out of the house and on their way, we're spending more time together and we enjoy that. We just spent eight or nine days in Oregon, just together. No agenda. No meetings. Took very few phone calls. Just experiencing nature together in a beautiful state. We want to do more of that and just spend more time together. I feel like, not to get too much on a romantic side track, but we've been married 34 years and I feel like we're more in love than ever and enjoying ourselves more than ever together.
Charles: That's fantastic.
Jim Stengel: So, I just want to make space for that. Continue to do this work that I'm so passionate about and continue to write. Probably over time, I will dial back consulting and I have a great team that can do that and do more writing, thinking, teaching, coaching.
Charles: And you have a new book coming out in September.
Jim Stengel: Yes.
Charles: "Unleashing the Innovators: How Mature Companies Find New Life with Startups." What was the inspiration behind that particular topic?
Jim Stengel: Well I was talking with Richard Pine at InkWell, who is my book agent who helped me with my first book to get started, and I was talking about what I'm finding in my practice. What I'm seeing in companies. We were just having a blue sky conversation. And I care about big companies. I spent a long time in one. I think when they get it right, they have incredible impact. So, Richard and I, in the nature of my business, now I am working with ... I run into a lot of startups. Often they pitch me on, "Can you help me with this?" Or, "Can you invest in this and that?" And he and I started talking about, it's very en vogue right now for big companies to be working with startups. And there have been a lot of good books written by people who are entrepreneurs and who are startups.
But we weren't sure anyone's unpacked what's really going on between the big companies and the startups and I thought that would be fun to look at. I thought maybe we could come up with some things here that help big companies that are trying to renew their culture. So, I didn't go into it with any pre-conceived notions other than to sort of unpack it. See what's going on. So obviously, we start with a lot of qualitative interviews and one thing led to another. I talked to a bunch of VCs about what they thought was interesting and what's going on. I got in touch with Joanna Seddon at OgilvyRED to help me with a quant study on this and we fielded a quant study. So it's about a two and a half year research project and writing and the stories are beautiful. What the book is really, it's written almost as a playbook for someone in a big company who wants to renew their culture and how startups can help them do that.
So, the finding we found in the research, in our qualitative, is those companies who went into partnerships with startups with a broader goal of impacting the larger culture, not just the startups they were working with are the ones that had the best results. It really starts with, if you want to start looking around, how do you prospect for startups? How do you bring them in? How do you structure for it? How do you get started? What happens when you hit bumps? How do you scale the lessons across enterprise? What it means for you as a leader, in terms of your courageous leadership. Is your company ready for it? We do a diagnostic at the end on that.
I think startups will enjoy it because there are a lot of great stories, but it's really written for those people in big companies who really do want to make progress against many of the things we're talking about. Being more creative, more nimble, more bold.
Charles: And it comes out in September?
Jim Stengel: You can pre-order now on lots of places. Amazon, Target, Barnes & Noble. And it ships on September 5th.
Charles: There are three themes that I've heard from you today that I think are underpinnings for your success from a leadership standpoint. I'm curious to see whether this resonates with you. One is, your humanity, which is evident, and you're unafraid to talk about wanting to make a difference in the world and I think there are not enough leaders who are just willing to do that and be in some ways what might be described as romantic, but I think the power of that is really extraordinary. Two, I think, your career has been marked by relentless curiosity. You're always interested in the next question and also understanding this one better. And then I think the third thing that's always struck me and has come out today is that you are always willing to invest the time that it takes to understand that problem and what the right answer is. And again, I think too many people are too willing to shortcut that process. There's a real rigor to your thought process. I was struck by looking at your bio how many things you've accomplished and have brought to a point where there was real completion around them.
So, does that resonate with you?
Jim Stengel: Yes, Charles. I think it's very astute. Yeah, in my years, it's been eight and a half years since I left P&G and I hear over and over again from people I talk to, not necessarily clients, but someone who just calls, they say, "Wow, I feel really good about what just happened." And I think it's because I'm pretty good at asking the right questions and taking people to places where they're reflective about things they may not have been thinking about. And I get over and over again, people say, "Wow, you're like a CMO counselor. Consigliere." And I think that's a nice thing. But I think it is the line of questions which is really one of the most important things for a leader is to ask the right questions, right? And the leaders that have been most challenging for me, I mean in a good way, just kept asking me questions where I'd leave the meeting, I go, "Whoa." So I think that's part of it.
Then I think the last one I'd put some top spin on it. I do try to ... I talked about this last night at the Hall of Fame program, I've tried to bring out the special potential in each person and that is always something different. So, I've looked to create a team that was diverse in many ways, then figure out how to get all of them on their A game. And that's tricky and that takes time, it takes investment. It's another one of those things where it's not something you do in a five minute drive by. Which are important, too, but it's deeper than that.
Charles: Well, you're right. Leadership does take time and again, I think having a little more patience and being willing to invest in that process to help people unlock their potential. Maybe at the end of the day, unlocking creativity is about unlocking the extraordinary human skills that everybody has, I think, and finding the right way to do that.
I want to thank you so much for being here. It's been a fascinating conversation and I'm grateful to you for making the time and I will see you in Cannes.
Jim Stengel: Very good, Charles. Thank you. It's a great chat.
Charles: You've been listening to Fearless, the Art of Creative Leadership. If you like what you've heard, please rate us on iTunes. It helps a lot. If you want more information on this episode or any of the others, go to FearlessCreativeLeadership.com and thanks for listening.