P&G loses legendary CEO

    The departure of Procter & Gamble's A.G. Lafley is a loss for P&G - and the business world at large.

    By Jennifer Reingold

    When I last spoke to A.G. Lafley back in November, he was raving to me about all the things that his successor, Robert McDonald, had managed to accomplish in his five months as chief executive of Procter & Gamble. So much so, in fact, that I asked him whether he had much to do as chairman of the board these days.

    "Honestly, [McDonald] has come into his own faster than I thought," he said. "This guy is fully performing. It's exactly what you hope happens." Still, he allowed, "It's nice to be needed."

    Apparently, Lafley, 62, has decided he's not needed quite as much as he thought he might be when he agreed to step down as CEO but stay on as executive chairman back in June.

    This morning, he announced that he would leave the board altogether in January, with McDonald taking over in the chairman position as well. "Our strategies and plans are working," he said. "This is the right time to complete our management transition."

    No matter what you make of McDonald, Lafley's leaving is a loss for P&G (PG, Fortune 500) -- not to mention the business world at large. It is not overstating things to say that Lafley brought P&G into the next century -- and turned the once-staid company into a hive of innovation, bold business deals, and an absolute focus on the customer.

    Today business looks to P&G not only for sophisticated new technology in its products, but also fresh new ways of marketing to the developing world -- and a management succession process that few companies can even dream of.

    Lafley's goal was to create a sort of mentoring process by which McDonald would be able to ease into the job -- the polar opposite of his own transition to CEO, when he was plunged into the hot seat with no warning after the firing of Durk Jager back in 2000.

    At that time, the company asked former CEO John Pepper to come back as executive chairman. He stayed in that role for close to two years, before the board felt comfortable that Lafley could fly on his own. This time around, it appears, the CEO didn't need as much help; the company seems to be coming out of its recessionary downturn with a new energy and a renewed commitment to "touch and improve lives."

    Sadly for every company on the planet, which would love to have him as an adviser, Lafley seems ready to take a break from executive work, as well as board service.

    So far, at least, the next new thing involves a lot of physical exercise (he's recently finished a triathlon). He has discussed writing books, but for the moment seems happy to let life take its own course -- something that any CEO knows is impossible when you bear responsibility for a $79 billion company.

    After such a full career, that may not be so easy. But then again, Lafley has made just about everything else he's tried seem that way.