P&G promoted Mr. MacDonald to CEO from within the company. Didn’t Mr. Lafley create a culture of innovation there? Wasn’t the company’s growth supposed to come from innovation?
A story in the Wall Street Journal on June 20, 2012 stated, “Former employees also say Mr. McDonald’s effort to speed up the process of bringing new products to market has collided with a deliberative culture infamous for its bureaucratic management layers, stringent consumer case studies and iconic one-page memos.”
The previous quote doesn’t strike me as an innovative culture. In fact, it sounds exactly the opposite.
In the same WSJ story the CEO was quoted as saying, “Mr. McDonald pointedly said the company hadn’t produced many new winners: “We haven’t created a new category or a meaningful new brand in some time.” ” What? I thought P&G was supposed to be an innovation machine, churning out lots of new things.
A quick look at P&G’s website indicates their strategic intent is to touch and improve the lives of more consumers, in more parts of the world, more completely. One can only wonder how this is being interpreted inside the company. It would be interesting to know how much internal effort is focused on operational efficiency and doing things right, versus doing the right thing and focusing attention on achieving the company’s strategic intent.
The world has been going through an extremely difficult financial downturn. Did the folks at P&G pull up the drawbridge on the castle and forget about innovation? Or are consumer goods companies so saturated with products they are finding it hard to be truly inventive or bring new relevance to customers?
P&G is a large and complex organization. Looking from the outside, one will never fully know all of the obstacles and barriers the leaders of this organization are facing. However, a couple of things strike a casual outside observer.
First, just because the leader of the organization said they were going to launch innovations doesn’t mean it will happen. One needs both C-level commitment AND a change in internal culture and structure. It looks like the internals of the company are not delivering on the vision of innovation.
A business leader can’t just state they want innovation, the entire organization must be oriented to supporting this objective. It is critically important for the people inside of the company to be in a mindset to change their markets in order to achieve growth.
Second, in order to deliver innovations over time, a systemic and iterative set of processes must be in place. These processes have to be strong enough to overcome internal inertia. Every organization has its own, unique day-to-day focus, and this focus will treat innovation like a disease without total commitment to finding ways to deliver new customer value. The organization will kill an innovation’s incubation and growth for many different reasons if not led with a purpose.
It will be very interesting to see if a company that staked its future success on innovation will actually be able to make it happen.
image credit: pg.com
Roy Luebke is an innovation expert focused on discovering new, customer-driven opportunity areas to help define the future of a company. He is inspired by knowledge and learning, and applying structured tools and methods at the crossroads of strategy and innovation to achieve business growth.