Thursday, September 17, 2009

P&G Innovative Products, Innovative Strategy?

On Monday, Rosabeth Moss Kanter published an article on Procter and Gamble’s new value based strategy. Kanter referred to the strategy as “stunning” and “counterintuitive,” which should say a lot considering she is a Harvard Professor specializing in strategy, innovation and leadership for change. The basis of the strategy that newly appointed P&G CEO Bob McDonald is currently on tour selling, is “purposed inspired growth.” In this strategy growth is based on meeting consumer needs, rather than creating consumer needs. In Brazil, P&G found that there was a need for a low cost laundry detergent, by spending time actually living with impoverished members of that community. They found that people were actually unable to pursue other economic activities, because their current mode of doing laundry was so time consuming. It was to meet this need that P&G developed the basico line (for essential in Portuguese). The basico line includes women's hygiene, diapers, and "greener" laundry detergent products. P&G marketed it using colorful but small in-store displays as opposed to their typical high priced T.V advertising. This new product line has been so successful in Brazil that is will actually be brought to consumers in the United States. Internally, P&G has focused on “evoking the heart” of their employees to “care about human needs.”

It seems clear to me that there is definitely a product innovation in the basico line. P&G did extensive market research, invented new products, and created a disruptive technology changing the way consumers have done laundry for hundreds of years. My question is whether or not P&G’s new strategy based on purpose and values, of evoking the heart and mind of employees to meet human needs is an innovative approach? I think that it is not because smaller companies have employed this strategy for some time now. I think that what is significant is the legitimacy that P&G brings to this strategy that could be perceived as “mushy” or only for certain niche markets. P&G, in this instance, is acting as a K Strategist; formalizing and improving on the “purposed based strategy.” We have typically discussed the benefits a K-strategist gains from being a late entrant, but this is an interesting example of the benefits that a strategy or an idea gains from the support of and implementation by a K-Strategist.

1 comment:

  1. This post made me think about how a company as large at P&G can take one product line like this one and promote its values as a new value strategy for the whole company. A friend of mine interned with P&G this summer and worked exclusively on the Tide account, but her department worked on a new specialized brand of detergent aimed at soccer moms - it's definitely aimed at creating a customer need. She always talks about how it's fascinating that P&G makes so many brands of products, many of them compete directly with each other. Michael's comments about being a k-strategist made me wonder how some large companies who are k-strategists protect themselves against their own innovations, and how they handle aligning a new product to the "values of their company" when that company makes so many varied brands and products.