There is an interesting report in Business Week by Kyle Stock on P&G’s dawdling innovation. He raises a few points relevant to any business. Particularly one riding the coat tails of this novel concept: making stuff that customers want to buy and not making the stuff they don’t.
Much has been written concerning A.G. Lafley’s disruptive innovation accomplishments. They have become in some circles legendary. Innosight an innovation consulting firm which “created” disruptive innovation touts it’s accomplishments as jettisoning P&G’s innovation. Therein lies the problem with innovation. Not all ideas should be innovated.
Moreover, in a world of relentless competition every innovation presuming it carries competitive advantage rather than doe-eyed amazement, becomes obsolete the moment it is introduced. No innovation or advantage is unassailable. Writes Stock, “… Barclays analyst Lauren Lieberman told P&G executives that their product pipeline in the last few years has relied on a “massive bundling of benefits,” rather than singular innovations.”
Is there a magic wand? Well 3M does a good job of finding one. Below are additional insights by Stock:
To be sure, it’s tough to be a giant consumer-goods company. Considering brand loyalty, there are arguably only three recipes for growth in the sector: geographic expansion, making better products, or luring new customers with new offerings.
Relevant articles: How a national innovation policy could benefit U.S.
Chocolate toothpaste is squarely aimed at winning new customers. Maybe it can shake up the toothpaste market the way P&G’s Swiffer swept up mop sales or its Tide detergent “Pods” have been cleaning up in the laundry category. But lime and chocolate toothpaste have the flavor of desperation, a strategy stretch for a company struggling to increase sales and fighting criticism that it has lost its innovation mojo.
In the two full quarters since A.J. Lafley slid back into the CEO seat, P&G sales have climbed just 1.3 percent compared with the year-earlier period, while its profit has slumped 6.1 percent. The company’s biggest releases in that time include a really tough paper towel and a deodorant intended to fight stress-related sweat. Just this morning, Barclays analyst Lauren Lieberman told P&G executives that their product pipeline in the last few years has relied on a “massive bundling of benefits,” rather than singular innovations. […]
Read full article P&G’s Chocolate Toothpaste: Innovation or Desperation? – Businessweek.
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Jim is president of InnoThink Group and Leadership Matters. He is a leader in workplace learning, productivity, performance, and leadership training solutions. For over 25 years, we have helped companies improve their performance, productivity, and bottom-line results.