The sheer brilliance of being simple

One of the most unfortunate things often taught to young people is the idea that the more complicated we make things, the more “big words” we use, the more slides and charts we employ, the smarter we look. They go from being simple and smart thinkers to complex and muddled thinkers. We train them in the wrong direction. We teach them skills they later have to un-learn in life.

Great minds are great simplifiers. It’s as simple as that! Einstein was amazing at simplifying complex concepts and making them explainable to the common individual. Business, at its essence, is a simple thing. But some people make a living out of making it complicated.

Back in the 1990s when Procter and Gamble, my employer, enjoyed a wonderful partnership relationship with Wal-Mart, the world’s largest retailer (a relationship that sustains to this day), I recall we were shown a video the CEO of Wal-Mart made for P&G executives. It was downright brilliant. Here was this Southern-born and -raised US CEO, with his folksy southern accent, saying the following:

“Why do you guys have to make things so complicated? Business is simple. You make a good product and give it a fair price. You sell it to me. I resell it as efficiently as possible to the customer and make them happy. That’s it. That’s business. It’s that simple. Why do we have to complicate it so much?”

I later worked for one of the world’s greatest-ever CEOs, AG Lafley, who, during his nine-year tenure at the helm of P&G, took the company to the loftiest of heights.

When AG took over P&G in 2000 it was a mess. The stock price had taken a battering and the company was “all over the place,” chasing business in far too many directions. AG had to get it back on track, and fast. He could have spent a year in analysis and bringing in all kinds of consultants to study things. He did not. Business is simple. It’s about nailing the basics and focusing on fundamentals. It’s about doing a few things really well.

AG Lafley is a brilliant mind and that means he is a great simplifier. After a few months, he came back to the leadership of the company with the key strategies to deploy to every level of the company. Now, one would expect a CEO of the world’s largest consumer goods company to come up with complex strategies that many would need a dictionary to interpret. Lofty-sounding sentences that ooze intellectual horsepower and genius behind them, right? Well, I will never forget the first two strategies and the brilliance in their simplicity:

“Big Brands, Big Customers, Big countries.” P&G competed in nearly every country in the world and sold to every customer and had hundreds of brands. We needed focus. We could not win all battles. So strategy one was a call to action — we would win with the biggest customers; the biggest brands first; and the biggest countries. Simple. They get the focus; they get funded first. They get the love and attention. If you worked on a smaller brand or smaller country, well, by all means keep pushing but realize you may not get your wish list for investment. Choices had to be made. It was simple. And worded exactly like it says! AG didn’t try to relabel it and spruce it up with vocabulary like, “We shall seek to win among our strategic pillars of X, Y, and Z…” No, he kept it simple. Because simple works. Simple is brilliant. Simple can be deployed to the lowest levels of the company with success.  Complexity is the realm of the muddled mind.

“We will win at the two moments of truth for consumers.” AG simplified the business. There are two moments of truth, or MOTS, for a consumer. The first (FMOT) is when they walk into a store and look at the shelf to choose a brand. We had to win there. Packaging design. Shelf price. Shelf placement. We had to win when the consumer was making this choice. Simple. The second (SMOT) moment of truth is when the consumer takes the product home and uses it. Is he/she happy? Does the performance meet, and ideally exceed, expectations?

P&G galvanized behind these simple strategies. Focus was put on big brands, big customers and big countries. The terms “FMOT” and “SMOT” became part of the language. People walked into stores and evaluated FMOT. We would look at our brands and ask, “Would you buy this?” We fixed pricing. Packaging. Shelf presence.

We ran consumer research on our brand performance versus competition. Made sure we delighted consumers. We upgraded products and formulas all over. We made sure we delivered on every brand promise.

By 2001-2002, P&G was firmly back on track, winning market shares all over the globe and AG Lafley was the darling of Wall Street. And well-deserved.

Business is simple. Simple works. And simple is brilliant. Manufactured complexity is not.

I had to laugh the other day on LinkedIn. Somebody posted an article about how Gillette had to cut prices in the face of losing market share. Some guy, some consultant with his MBA, posts the article with his commentary on how “Gillette is being challenged by disruptive innovation, blah-blah-blah.” A complex and muddled bunch of over-thinking. An old friend, a pragmatic and down-to-earth former P&G sales guy named Phil Wall, left a brilliant comment: “I don’t know about disruptive this or that. But it’s not rocket science. It’s simple. The issue is greed. Gillette took indiscriminate pricing every year for years. Now it costs $32 for a pack of four blades! That’s the issue. It’s called overpricing and greed and now it has to be corrected.” And Phil is totally right. It’s not complicated. It’s the basics like consumer value. How can anyone pay $8 per blade and feel it’s good value?

It breaks my heart when we lose sight of this. When we teach young talent that complexity is what matters. That length of a presentation or a memo is what matters, as if we pay people “by the page” for a PowerPoint presentation! I am sad to see people seemingly using a thesaurus to change every simple word into a complex one simply out of zeal to “sound more intelligent,” not knowing that the world, and great leadership, value simplicity.

I was asked to speak recently to a group of students. I always agree to do this. Teaching young talent keeps me young! I asked about the topic so I could prepare. The answer I got was, “The emerging influence of corporate multifunctionality.” WTF? I started laughing. I have worked for P&G. Coca-Cola. And now BAT. Three of the finest companies in the world. And I have never heard the term “corporate multifunctionality.” So I googled it. And nothing really exists. When you type the word, spellcheck picks it up as a mistake! So I asked. And it turns out some professor, who clearly has never worked in a real business, cooked this term up as his next book idea. I still can’t explain what it is and neither could any of the student organizers. But they had to “appear brilliant” by tossing around terms that don’t make any sense simply because this is what they are taught to do. So we sat and talked about what do the attendees really want to hear about? We opted to talk about leadership and how to take the right decisions early in one’s career. The speech was a huge hit, standing ovation. I never mentioned the term “corporate multifunctionality.” I still haven’t heard the term since. That’s the way to sell a new book. Create a term! Maybe this sells books. Maybe. But it teaches young leaders the wrong approach.

Even my own organization can suffer from this. Simple is not synonymous with superficiality or a failure to properly penetrate the business. We must always seek to understand and penetrate the issues. But the solutions and the thinking arising from this analysis can and should be simple. Simple is brilliant.

We had done some good analysis on the business and we had a very clear and simple action plan. It really made sense and, in fact, in early testing it was working very well. Huge gains to the business.

Some of my team were tasked to share this program with senior management. And when we went through the slide deck, the complexity disease had hit! Instead of the needed two slides, it was 10. Instead of a simple explanation, it was a thesaurus of terminology and complexity!

We had to make major changes. And while I am “Mr. Simple” and have always had a knack for simplifying complex concepts, somehow I failed as a coach in this instance to train my team. And in the absence of good training, the old approach of “trying to look wise” kicked in. It is my failure, not my team’s.

If you can take a strategy like AG Lafley did, and say it to your 80-year-old grandmother and she will understand it, well, this is brilliance. And, this is the test. This is strategy at its best. This is success. Because your consumer should be able to understand your strategy. Because in consumer goods, 80-year-old grandmothers are the consumer!

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Questions and comments may be directed to Facebook, James Michael Lafferty.