Back before A. G. Lafley retired from Procter & Gamble (P&G) in 2010 and before he was more recently considered P&G’s comeback kid, he wrote about building a “world-class organic growth engine” based on investing in people. In his article, Lafley discussed that P&G believed it to be important to focus on open innovation for several reasons, including:
- To broaden their capabilities by encouraging business decision-makers to determine what kinds of innovation would work best;
- To build an open innovation culture to meet the growth opportunity and challenges of emerging markets; and
- To foster teams to promote more successful, collective innovation.
The way P&G finally moved towards an open innovation culture was through several measures. In Lafley’s language, these measures were:
“The Consumer is Boss”
This is a concept that the people who purchased and used P&G products were rich sources of information for P&G through listening, learning and testing. Key was to get out of the office and into customers’ homes to personally observe their product use and customer needs.
P&G innovated how they innovate, including scalable innovation, pervasive innovation across the entire enterprise, reverse innovation and social innovation opportunities such as open office spaces for executives, an open and round conference room.
The Talent Component
P&G encouraged curiosity, collaboration and connectedness and went a step further by investing in their people, including operational and innovation leadership development, working across businesses, geographies and markets. Further, P&G’s way of innovation revolutionized their recruitment methods and efforts.
Integrative thinking is thinking across functions, regions and ideas, all the while keeping the customer at the center of the process.
Over time, P&G went through many of the same exercises as other companies, including cost-cutting and productivity. Eventually however, P&G moved towards open innovation because of its competitive advantage. This move towards an innovation culture allowed for mistakes so that they would serve as facilitated learning opportunities and further, P&G established that innovative, replicable processes were also valuable. As a side-effect, the old silos were being dismantled and cross-functional collaboration drove sustainable growth. As Lafley wrote, “Our culture of innovation is helping P&G leaders be more effective, and in the process, they’re renewing our company every day.”
Lafley helped assist P&G succeed at game-changing innovation once in his previous tenure and that makes his return to P&G quite exciting.
Source: P&G’s Innovation Culture