Innovation at Procter & Gamble

Let's take a look at how Innovation is a key strategy for Procter & Gamble (P&G) to stay on top of the game.

P&G is very adaptable to changing customer demands by carefully and clearly defining its innovative strategies; however, it almost lost its market dominance to competition in the mid 80’s had it not been its aggressive play-to-win strategy.

“Senior P&G management admitted that they had not had a breakthrough innovation since 1985, and the company’s continued market dominance in the years ahead was in question”

The play-to-win innovation strategy has helped P&G regain its industry leadership. It needed a different management and leadership style and approach. The pre-dominant leadership or management style in P&G is that of participatory, delegating, and empowerment. Management has decentralized decision making process in such a manner that middle level management most at times do not have to wait for headquarters approval and funding; in order to embark on certain key innovative projects. Because of the empowerment given to mid and senior level management within this multinational corporation, it is much easier for management to customize products and customer services internally. It is abundantly clear that, the success of this giant corporation can be closely tied to its management and leadership style.

“He restored focus on leading brands and reminder everyone in P&G that the measure of success was not innovation per se, but the consumer” – Davila, T., Epstein, M.J., & Shelton, R. (2006). Making innovation work.

This is a clear customer focus leadership style of a CEO who was brought in within the corporation to strengthen employee morale and to refocus employees’ attention to providing the needs and wants of customers in this ever changing global market.

P&G management has recognized that in oder to be a leader in the industry, they have to continuously change and innovate from the grass roots. Sometimes, what employees do not understand is the impact of change on their professional and family lives; and it is the responsibility of management to communicate this impact to employees both positive and negative; but mostly, management overemphasizes on the positives and pays little attention on the negative impact.

Managerial changes viewed as good and necessary can be seen by employees as intimidating and even terrifying. But when companies don’t take this into account, and force changes that employees aren’t prepared to handle, those companies risk alienating their workers, losing money and, in the end, seeing those great strategic changes fall flat. -Kinick, A. (2007). Fight or flight: How employees cope with organizational change

This is a communication strategy that P&G has been successful in implementing corporate wide.

Innovations can have both positive and negative implications. A few years ago, people were discussing the “revenge of technology”. Now there are a few people that are warning us about the “pursuit of technology”. Whatever the pundits say, the future is probably going to happen anyway. So here is my initial list of characteristics of innovations that might change the world: Anything that provides a service or solves a problem in a significantly better way, anything that changes how society works or plays, anything that eliminates a major problem (or cost) for people and or organizations. (p.1)

The reason why leadership hype is critical for innovation, creativity and change in an organization is that; at P&G innovation or change occurs from top down. This sends a clear message to everyone that if the entire leadership has changed to accommodate innovation, it’s about time for them to change also (employees). Management makes employees creative and innovative by hyping innovation and making it a priority. To encourage creativity and innovation within an organization, leadership must hype it; institute a reward system to compensate creative employees and link innovation and creativity to the broader mission and vision of the organization. -Keeley, T. (2007). Characteristics of innovation.

Corporate culture and learning are particularly important when managing an organization wide change. Learning organizations turn weaknesses and threats into strengths and opportunities by not getting frustrated and quitting when confronted with difficult situations and challenges. This is how P&G learns and more importantly, builds its culture to understand that quitting is not an option in the innovation process.