- March 14, 2025
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During his two highly successful stints as CEO of consumer products giant Procter & Gamble, A.G. Lafley once found himself on a riverbank in western China, visiting with women washing clothes.
It wasn’t a wayward tour. Instead, it was an example of Lafley — who retired from P&G in 2015 and now lives in Sarasota — doing what he says often did: modeling behavior he wanted to see from the company’s leaders. (Cincinnati-based P&G is now a Fortune 50 company with a market capitalization of $394 billion.)
Lafley remains invested in modeling, or articulating in this latest case, good leadership behavior. This stems from an article he co-authored with Roger Martin, former dean at the Rotman School of Management at the University of Toronto, in the January/February issue of Harvard Business Review.
The title, “Leaders Shouldn’t Try to Do It All,” belies what it’s really about. Yes, there’s an element of time management counsel in the piece, which Lafley backs up in a phone interview after it was published. But after speaking with him and reading the article — focused on something called the Theory of Comparative Advantage — I believe a closer-to-the-point title could have been “right person, right task,” a sort-of sequel to Jim Collins’ “right people, right seats” mantra in his book “Good to Great.”
The right person, in this case, is the CEO. The right task, however, isn’t just what the previous leader did or even necessarily what the CEO is good at. The authors’ believe the CEO should be doing the things he or she is tremendously better at than anyone else.
“We suggest that overwhelmed leaders follow a four step process: the first two steps involve getting tasks off their calendars,” they write. “The second two, putting tasks on.”
To get to the tasks, the authors first explain the Theory of Comparative Advantage.
Recognized as a seminal theory in international trade despite dating back to 1817, the idea, from political economist David Ricardo, is nations should sell goods or services to only the places where it has a comparative advantage. To wit: Portugal, by Ricardo’s example, the authors write, exports wine to England because it has a comparative advantage over the Brits in sunnier weather to grow grapes. But Portugal wouldn’t push wine in Italy — it has no comparative advantage there. England, meanwhile, exports wool to Portugal because the comparative advantage the Brits have is the perfect weather for raising sheep.
Lafley, 77, joined P&G in 1977, after a five-year stint in the U.S. Navy and earning an MBA from Harvard. He worked his way up in the company and was named CEO for the first time in June 2000. In our interview, Lafley says he utilized a version of the theory upon being named CEO. And that was a treacherous time for P&G: Its stock price was down 50% for the year, and it had flopped two straight earnings quarters.
“I studied the past five or six CEOs,” Lafley says, discovering “they were more the same than they were different. I realized if I kept doing it the way they did it in the 80s and the way they did in the 90s, we weren’t going to be a success.”
Comparative advantage became Lafley and Martin’s north star; Martin, like Lafley, led a major turnaround at the Rotman School. “Leaders shouldn’t spend their scarce time on activities simply because they are very important,” they write. “They should do only the things that nobody else in the organization can do nearly as well — if at all. And they should spend as much of their time as possible on them.”
The four points to Lafley and Martin’s version of the Comparative Advantage theory include:
For Martin this was hiring faculty — a task, they say in the article, that took his predecessor at least 50 days a year to accomplish. But hiring people, when others already on campus can do that, and do it well, is an "example of what we often see as a should do,” they write, and not an advantage for Martin over other schools. For Lafley, the a-ha comparative advantage moment came during his second stint as CEO, from 2013 to 2015. That’s when he realized his CFO John Moeller could handle the myriad meetings with Wall Street investors and analysts required of a company P&G’s size. Obviously an uber-important task, but not something Lafley could do significantly better than other CEOs, or even others on his team. (Moeller was named CEO of P&G in 2021)
Once you punt away tasks with which you have no absolute advantage, shed the ones, the authors write, for which you have a modest advantage. Lafley, to cite one example, trusted unit presidents and other leaders to represent P&G on industry associations and attend big-wig events, from Washington, D.C. to Brussels to Beijing. Lafley takes pride knowing he only attended the World Economic Forum annual meeting once — when it was held in New York City after the Sept. 11 terrorist attacks in 2001. Martin meanwhile, worked closely with his chief administrative officer to delegate financial management of the school, a task, the authors say, that had “been a big time sink for his predecessors.”
“The payoff for all the hard and sometimes controversial choices to remove tasks from leaders’ calendars is the freedom to add tasks for which leaders have a significant comparative advantage and that can make a decisive difference in the organization’s performance,” the authors write.
The challenge? To use the found time wisely, and differently, says Lafley, who has remained active in retirement as the CEO of the The Bay Park Conservancy, an ongoing project to transform 53 acres in downtown Sarasota, on the water and owned by the city, into a signature public park.
At P&G, Lafley invested his found time in product innovation. That includes what the authors call leading P&G’s “shift to the now-famous and much imitated Connect + Develop approach to innovation.” That also includes his noted trip to China where he witnessed P&G customers using the company’s products.
Martin, meanwhile, reinvested his time on fundraising. But he didn’t use the traditional approach of checking the list of wealthy alumni and asking for money. He instead published dozens of books and articles and delivered multiple conference presentations a year. The goal was to make Rotman a management thought leader, and in turn motivate the business, education and civic communities, not just alumni, to be part of the movement. The strategy worked: Martin raised close to $250 million in his 15-year tenure as dean.
One of the biggest uses of Lafley’s time at P&G was spent building the future leadership team — a task well-suited for his skill set, the leaders write. He met one-on-one each quarter with the heads of each business, every region and all the functions. That translated to 30 meetings a quarter lasting from a half-hour to an hour. “Those meetings helped him motivate his leadership team members and gain insight into their development needs and personal interests as well as their strategic take on their business,” they write. “Nobody else could have done that.”
Martin, in a similar tact, invested in future leadership by meeting once a year individually with each professor. That grew to include 120 full-time professors and 50 adjuncts, taking up eight weeks a year. The payoff: faculty turnover and grievances fell to all-time lows.
The authors have used the comparative advantage theory not only in their own work, but with high-level leaders they mentor. “Leaders will never have enough time on their hands…” they write. “But there’s no need for them to feel overwhelmed. Those who use the principles of comparative advantage to move some tasks off their calendars so they can take on truly critical ones will give their organizations the best chance of achieving competitive advantage — and will prosper themselves.”
