The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble.It specializes in a wide range of personal health/consumer health, and personal care and hygiene products; these products are organized into several segments including Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine, & Family Care. Before the sale of Pringles to Kellogg’s, its product portfolio also included food, snacks, and beverages. P&G is incorporated in Ohio.
In 2014, P&G recorded $83.1 billion in sales. On August 1, 2014, P&G announced it was streamlining the company, dropping and selling off around 100 brands from its product portfolio in order to focus on the remaining 65 brands,which produced 95% of the company’s profits. A.G. Lafley—the company’s chairman, and CEO until October 31, 2015—said the future P&G would be “a much simpler, much less complex company of leading brands that’s easier to manage and operate”.
Companies typically don’t open their innovation centres and reveal their cutting-edge technology to outsiders, but P&G gave us a peek at theirs under an NTUC programme to help working people progress in their careers Called the Innovation Exchange (IEX).
1. Innovation Has Kept P&G Relevant For Decades
P&G has established itself in 1837, which means that it has been 180 years since the FMCG company gained a foothold in the industry. From their early years of making soap and candles, to creating shampoos, shavers, and even more today, P&G has been constantly innovating to make everyday life better for their consumers.
“Innovation has always been in our DNA. It’s how we drive growth, prevent the commoditisation of categories, reduce costs, and deliver value,” said James Kaw, Director of P&G’s Singapore Innovation Centre (SGIC).The company spends nearly US$2 billion annually on R&D. And each year, it invests at least another US$400 million in foundational consumer research to discover opportunities for innovation. Kaw strongly believes that innovation starts with the consumer itself and as such, P&G places a huge focus on gaining insights into consumers’ everyday lives so they can combine “what’s needed” and “what’s possible”.
As such, P&G ropes in consumers in their product development process. It invites a group of consumers to its Consumer Lab – housed in its Singapore Innovation Centre – so that P&G researchers can observe how they use the products in a regular, everyday setting.
Ultimately, their goal is to offer consumers product options at all pricing tiers to drive preference for their brands and provide meaningful value.
2. Customise For Your Customer
At P&G, the innovation efforts are focused on the needs and demands of the customer, especially since customer needs tend to constantly evolve. Kaw also pointed out that businesses must also innovate their products according to customer habits. Citing Pampers – their first 10-billion-dollar brand – as an example, Kaw said the product is reinvented based on the target market.
“In the US, Pampers is a tape diaper because parents typically change diapers on a changing table. But in Japan, the babies’ diapers are changed on a ‘tatami’ (traditional Japanese mat),” said Kaw. “Since it’s done on the floor, babies tend to run around the room, which makes it harder for the parents to put on the diapers. And that’s why we’ve come up with pull-up diapers for this group of consumers.”
3. Diversity Is Strength
In Asia, P&G hires 10,000 staff from 70+ countries of origin, with three innovation centres spread across the region, including Singapore. With over 61 nationalities, their 7,000-strong R&D team (of which 1,000 are in Asia) adopts a very diverse thinking.
4. Protect Your Innovation
How does P&G work on preserving innovation? Patents.
So far, it has secured 55,000 patents globally.
“Novel ideas that are superior to existing solutions is the basis of a strong foundation; and patent is an important way for us to protect the novelty of this idea.”
Kaw emphasised that these novel ideas, or “inventions”, need to be consumer-centric to be considered of value.
He pointed out that “inventions are worthless if you cannot translate it into consumer need. You need to show why it’s important.”
5. P&G = Persistence And Grit Against The Odds
“As you innovate, you are bound to face challenges or experience failures. And usually when you have a new idea, people will shoot you down and say that it will not work. That’s why you need persistence and grit – that’s what P&G stands for,” said Kaw.
“How you deal with failure will determine your success. If you get disheartened by failure and you spiral down, that’s not going to be helpful. You need to have the ability to pull yourself up and keep going. That’s how you can continue to innovate,” he added.
But how does P&G assess this intangible trait of persistence and grit in interviews?
“What you do in the past will always be a reflection of your future. Our interview processes is very much focused on what you’ve done in specific areas, your learnings, and how you define the problems. These are the areas we look out for during interviews and it helps us frame the ‘fit’ of the people”.
“Some people may or may not fit with P&G. Ultimately, we look for people who have technical aptitude, ownership (to own the problem and look for solutions), confidence, and very engaging attitudes.”
6. Note To All Bosses: Invest In The Right People
For generations, P&G created most of its phenomenal growth by innovating from within – building global research facilities, and hiring the best talents.
“P&G is a culture that is very different from most organisations. We only promote from within so it is incredibly important for us to invest in people – to develop the best and to retain the best. If we don’t do that, it takes a long time to replace them.”