Proctor and Gamble 2008 Annual Report Download - page 10


MakingP&G’sdesignforinnovationworkisthejobofleadership.
Innovationisahumanactivityandleadersmustunleashthe
creativity,initiative,leadership,andproductivityoftheinnovators
intheirbusinesses.Thisrequiresablendofintelligenceand
empathy.Empathyisincrediblyimportantinadiverse,people-
intensivebusinesslikeours.Mostofourcreativityandinnovation
happensinteams,andoftentheteammatesareworkingin
differentpartsoftheworld.
Toleadinthiskindofenvironment,weneedabalanceof
intellectualskillsandempathicskills.Wehavetodevelopthe
intuitiontounderstandandappreciatepeople’sintentions,
feelingsandmotivations—allofwhichhavebeenshapedby
experiencesthatmaybesharplydifferentfromthosewe’ve
grownupwithourselves.
Atthesametime,innovationleadersmustbedecision-makers.
Theymustexercisethejudgmentandthecouragetotake
innovationrisksandtounderstandtherolefastfailureplaysin
theinnovationprocess,whilealsobeingwillingtostopprojects
andreallocateresourcestobiggerinnovationopportunities
whennecessary.
I’mabigbelieverthatinnovationleadersaremade,notborn.
Theylearntogetcomfortablewithuncertainty.Theylearnto
becomemoreopen-minded,toco-createwithconsumers,and
tobereceptivetoideasfromdifferentdisciplinesandindustries.
Theylearntobecomebothstrategistsandoperationalmanagers,
tobeagileanddisciplined.Astheylearnandgainexperience,
theybecomemoreeffectiveatleveragingP&G’sdesignfor
innovationtodeliverconsistent,sustainablegrowth.
Theabilitytoleadeffectiveinnovationprogramsisrequiredat
P&G,particularlyatthegeneralmanagerandpresidentlevels.
Goodinnovationleadersneedtobecultivatedandpromoted—
andIholdmyselfaccountableforhelpingtoselectanddevelop
theinnovationleaderswhorunP&Gbusinessesaroundthe
world.EnsuringP&Ghastheleadersandthepipelinetoinnovate
forthenexttenyearsisoneofmymostfundamental
responsibilitiesaschiefexecutive.

ThemostdifferentiatingaspectofP&G’sapproachtoinnovation
isthescaleandscopeofourbusinessandbrandportfolio,
scienceandtechnologyplatforms,andgeographicreach.
Thediversityofourbusinessportfoliocreateshighlyvaluable
scalebenets.OurHealth&Beautybusinessestakeadvantage
ofpurchasingpoolscreatedbyHouseholdbusinessessuchas
laundry,diapersandpaperproducts.Thisenablesthemto
purchasepackingmaterialsandbasiccommoditiesatlower
pricesthantheirdirectcompetitors.Similarly,HouseholdCare
enjoyseconomiesofscalecreatedbythelargeadvertising
budgetssupportingourHealth&BeautyCarebusinesses.
Weusethesescaleadvantagestoinvestininnovation.
ThediversityofP&G’sbrandportfoliogivesustheopportunity
toinnovateinmoreaspectsofconsumers’livesthannearlyany
othercompany.P&Gbrandsareineveryroomofthehouse,at
virtuallyeveryhouroftheday.Asaresult,wegettoseemore
ofconsumers’needsthanothercompanies.Thishelpsusspot
moreproblemsP&Ginnovationcanhelpsolveandmore
aspirationsP&Gbrandscanhelpachieve.
Ourscienceandtechnologyportfolioisanotherhugescale
advantage.BleachtechnologyfromLaundryhasbeenusedin
Health&BeautyCareproductssuchasCrestWhiteStripsand
Nice‘nEasyPerfect10HairColorant.Non-woventopsheet
technologystartedinDiapers,traveledtoFeminineCarethen
movedtoSwifferandOlayDailyFacials.Proprietaryperfume
technologyhasbeenusedtoenhancetheperformanceof
Bounce,Febreze,FineFragrances,Camayandmostrecently
SecretandGilletteClinicalStrengthdeodorant.We’renow
combiningGillette’sexpertiseinmechanicalengineeringwith
ourexpertiseinchemicalengineering.
CompaniesthatcompeteprimarilyinBeautycan’tbenetfrom
suchtechnologytransferbecausetheydon’thaveaLaundry
business.HomeCarecompetitorscan’tmoveasubstrate
technologyfromdiapersorfemininehygieneifthey’renotin
thosebusinesses.Thereisnoothercompanyinourindustry
whoseportfolioofbusinessesandbrands,sciencesand
technologiesisasbroad,asdeeporasdiverseasP&G’s.Thisis
averysignicantsourceofcompetitiveadvantage.Weuseour
diversemixofsciencesandtechnologiestomakeinnovation
connectionsthatothercompaniescannotmakeontheirown.
AnotherareainwhichwecanleverageP&Gscaleisour
geographicreach.IndevelopedmarketsliketheU.S.,whereP&G
brandscanbefoundinvirtuallyeveryhousehold,weleverage
householdpenetrationasascaleadvantage.Indeveloping
markets,we’reusingourportfolioofleadingbrandstoattract
andbuildanetworkofbest-in-class,oftenexclusivedistributors
incountriessuchasChina,IndiaandRussia.Todayourdistributor
networkinChinareachesabout800millionpeople.InIndia,
ourdistributornetworkcovers4.5millionstores,anincreaseof
twomillionstoresinjustveyears.InRussia,wenowhave
accessto80%ofthepopulation.
8 TheProcter&GambleCompany