BOSTON, June 4, 2003 -- Alan G.( "A.G.") Lafley (Harvard MBA 1977), the CEO of Procter & Gamble, who is credited with turning around the Fortune 100 company after more than a decade-long slump, emphasized to Harvard Business School graduates at Class Day ceremonies today that life's "twists and turns" should be embraced rather than feared, while sharing with them "Ten Things I Wish I Had Known at Graduation."

"Life will take you in directions you cannot anticipate," he stressed. "Don't get too comfortable with where you think your life is headed. There are surprises ahead!"

Lafley, who became CEO of Procter & Gamble in 2001 and rebuilt the company around well-known brands such as Tide, Pampers, and Crest, noted that he had "no regrets" about learning some of life's lessons the hard way. Nonetheless, his desire to "flatten the slopes of the learning curve" for members of the HBS Class of 2003 led him to offer advice for grappling effectively with life's challenges, whether at home or in the workplace.

Lesson One: Know yourself.
A personal mission and values statement is a helpful tool in the quest for self-knowledge, said Lafley, who wrote his own statement during a P&G training session in the mid-80s. "It made me think through all my roles in life - not only as a professional, but also as a partner and spouse, as a father, a friend, and a citizen."

Lesson Two: Be clear about your values.
Personal values such as integrity must be non-negotiable, particularly in today's scandal-marred business world, Lafley emphasized. "People will watch and judge what you do. To succeed in life and in business, it's essential that you earn - every day - the trust of those around you."

Lesson Three: Respect your customer as boss.
While running retail and service operations - first in the U.S. Navy and later at P&G - Lafley learned that complaints had be resolved "to the customer's delight." "Resist the temptation to think you're smarter than the customer," he pointed out. "The reality is that customers know more than you and I about what they want and need."

Lesson Four: Change is inevitable, pervasive, accelerating, and increasingly unpredictable.
Observing that it is human nature to fear change, Lafley reminded the audience that a general manager's job is to turn change into an advantage. "Change is the only constant in life," he said. "Those who embrace change will win decisively and disproportionately."

Lesson Five: See things as they are.
Three years ago, P&G's leaders came to grips with a number of unpleasant realities, from the underperformance of some of its major businesses to its frayed relationships with retail customers. "We refocused on the fundamentals of operating, discipline, and executional excellence, and got P&G back on track," said Lafley. "It sounds simple, but it's not. It's never easy to put the reality 'moose on the table,' but that's what leadership is about."

Lesson Six: Balance management and mastery.
Credibility as a general manager comes from first mastering various skills. "When I joined P&G, I decided I was going to become a master marketer, and be the best damn 'brand man' I could be," Lafley said. "Later in my career, I became a student of leadership."

Lessons Seven and Eight: The power of strategy and the power of execution.
These lessons are interconnected, because execution is the only strategy customers ever see. In learning to formulate strategy, Lafley recommended that HBS graduates read the works of military historians as well as those of modern business gurus. "Strategic choices provide direction, but it's execution that delivers results," he declared.

Lesson Nine: Leadership makes a difference.
Leaders not only see things as they are and make choices that create advantage, but they also create conditions in which the people around them are motivated to lead. "Your success and legacy will not be determined by what you do," stated Lafley. "It will be reflected in what the leaders you develop go on to do."

Lesson Ten: Go with your passion and have fun.
Helping billions of people around the world look and feel better through P&G's household products has been personally rewarding, Lafley said. "I can tell you from experience. If you find a good match, it is remarkably motivating."

A native of Keene, New Hampshire, Lafley received his undergraduate degree in history from Hamilton College and planned to become a professor, but the Vietnam War intervened. Enlisting in the U.S. Navy, he ran grocery, department, and specialty stores at a base near Tokyo and became "hooked" on business. After earning his MBA at Harvard, Lafley embarked on his 26-year career at Procter & Gamble.