Transcript of "P&G from Push to Pull by Peter Fisk"
+genius proctor & gamble … from push to pull Extract from “Creative Genius. The innovation guide for business visionaries, border crossers and gamechangers” by Peter Fisk AJ Lafley departed P&G at the end of 2009 after a remarkable decade of transformation at the consumer goods business. The first thing Lafley told his managers when he stepped up to the CEO job in 2000 was just what they wanted to hear: Focus on what you do well -- selling the companys major brands such as Crest, Tide and Pampers -- instead of trying to develop the next big innovation. Now, old staples of the P&G stable have done so well that they are again the envy of the industry, whilst many new innovations not sit alongside them. Back in 2000, Lafley, 23 years in P&G, wasnt supposed to be a radical change agent, he was supposed to bring some stability back to the business. Having spent his early years managing Tide, a decade running the Japanese business, he had recently returned to head up North American operations. He recognized the need for change, the need for more speed and agility, a deeper understanding of consumers, and a more radical approach to innovation. In his time in charge, P&G has not only experienced transformation internally, but has absorbed some of its largest competitors too - buying Clairol for $5 billion in 2001, followed by Wella $7 billion, and Gillette for a huge $54 billion in 2005. He has replaced at least half of his most senior managers top 30 officers, and cut many more jobs as part of his vision to turn P&G into a virtual brand-owning company, with brand building and innovation as its core business, with much of the latter done in partnership with others. Lafley’s initial rallying call was incredibly simple, almost embarrassingly so, as he reminds people in meeting after meeting that “the consumer is the boss”. With this phrase he is turning P&G inside out – or more precisely, outside in. firstname.lastname@example.org www.thegeniusworks.com +genius
+genius Symbolically he tore down the walls of the executive offices, including his own. He moved people about, for example seating marketing and finance people together to drive faster, more collaborative, more commercial, much customer-driven ways of working. He spent hours, himself, talking to real consumers in their homes around the world - about how they live, how they cook, how they clean. When his managers came to him with an idea, he was ready to respond with a consumer’s mindset. Innovation, in particular, has come under the microscope. Despite battalions of scientists and engineers, P&G hadn’t delivered a real innovation in decades, despite millions of dotcom-style dollars being pumped into internal ventures. When they tried to innovate, it was always based on a technically-advanced product offer, rather than something consumers actually wanted. connect and develop Two major initiatives drove his innovation agenda – “Connect and Develop”, a co-creation approach to developing new ideas with partners and consumers, and “design thinking”, using those insights to create dramatically improved brand experiences. “Connect and develop” started from Lafley’s goal that at least 50% of new products should come from outside, compared to 10% when he began. This would require a huge culture change, from a world where research scientists ruled, to one where ethnographers had the upper hand. The new approach was also about collaboration, with a diverse array of partners who had specialist skills and perspectives which P&G didn’t, and couldn’t have internally. The initiative is P&G’s version of open innovation – working in partnership with external expert companies to access their ideas and capabilities, and equally those of consumers. It works in both directions, inbound and outbound, and encompasses everything from trademarks to packaging, marketing models to engineering, business services to retail partnerships. It started with Lafley’s goal that at least 50% of new products should come from outside, compared to 10% when he began. This would require a seismic culture change, and putting your future in the email@example.com www.thegeniusworks.com +genius
+genius hands of others would be risky too. The new approach is about collaboration, with partners who have specialist skills, P&G doesn’t, and with consumers. design thinking "Design thinking" has also become a core driver of P&G’s culture change under Lafley. Business leaders have learnt to focus and listen, build and design – rather than order and control. Teams work together rather than apart. The best ideas come from customer immersion not from the research scientists. Business cases have been reduced to one page posters, rigorous evaluation has been overtaken by rapid prototyping, and new products and services are rolling out like never before. "It has been transformative for our leadership teams," says Cindy Tripp, marketing director at P&G Global Design, when describing her task implementing the companys new approach to design-centred innovation to Business Week. Embracing 100 internal facilitators, more than 50 design thinking workshops are held in P&G business units across the globe each year. The facilitators comes from every function at P&G, pushing the workshops to think beyond products, and at least half the time is spent thinking about strategy, retail, operations and consumer applications. People are encouraged to learn fast, and sometimes fail fast, every day. . Olayforyou.com is a new online beauty service. It provides a calming, easy way to receive a professional beauty consultation without ever leaving your own home, all using intuitive programming, based human-centred interface design. Through menu choices that indicate your interests and skin issues, Olay is able to start a new type of dialogue while collecting important data that can be more informative than expensive market research. Design thinking was initially driven by VP Design, Claudia Kotchka who was asked by her then CEO Lafley, to build design into the DNA of the company. At P&G this would normally result in a complex, highly specified process but she knew that good design comes through attitude rather than dictate. It needs a cultural pull rather than process push mechanism to work. At first people wanted to know about the academic theory behind the process, which stifled thinking and behaviours, but slowly they embraced the more experiential approach, engaging in problem- solving rather than product-thinking became intuitive to them, as did the search for new stimulus that led to creative solutions. The resulting design thinking workshop structure became more of a fast-paced immersive experience that ends with a serious reflection point about whats different using this methodology. The main lesson was that people need to do design thinking rather than just think about it. People who previously sat behind the safety of desks and lab benches were initially scared to talk to real consumers, or to just build a prototype and try new ideas. But then by doing it they found it worked. Indeed, counter intuitively, the less finished the prototype, the more feedback it got. Kotchka, wirting in Front End Innovation believes that “design thinking activates both sides of the brain—it makes participants more creative, more empathetic toward the human condition P&G consumers face. Our managers dont leave their analytical minds at home; instead they are able to operate with their whole brain, not just the left hemisphere." Net revenues have grown from $55 billion in 2005 to $79 billion in 2009, with 60% growth in profits over the same period. Not only this, but 42% of P&G products now include an externally sourced component. It seems that P&G, with the customer as its leader, and design thinking as its discipline, is doing very well. firstname.lastname@example.org www.thegeniusworks.com +genius