Proctor and Gamble's Innovative Culture

Proctor and Gamble (P&G) has long been known for its innovative culture. P&G’s principles reflect Schein’s categories of problems that culture solves (see http://www.pg.com/en_US/company/purpose_people/pvp.shtml for the principles).

P&G’s mission is seeking to be the best with the goal to “create and deliver products, packaging and concepts that build winning brand equities.” They accomplish this through being strategically focused and operating “against clearly articulated and aligned objectives and strategies,” as well as only doing work that adds value. Furthermore, they state that “innovation is the cornerstone to our success,” which will be discussed subsequently. Their criteria for success is benchmarking their performance “rigorously versus the very best internally and externally.” They strive to learn from their failures as a remediation tactic. Common language includes honesty, integrity, personal mastery, diversity, and sustainability. People included in P&G are those who “want to contribute to their fullest potential,” “achieve high expectations, standards, and challenging goals,” and have “outstanding technical mastery and executional excellence.” The reward for these people is stock ownership and ownership behavior. The criteria for intimacy is “doing what is right for the business with integrity” because this creates mutual success for the company and the individual. “Confidence” and “trust” are also important because employees must “work together… across business units, functions, categories and geographies.” Lastly, P&G’s ideology is to “challenge convention and reinvent the way we do business to better win in the marketplace,” which is essentially innovation.

Innovation is critical to P&G’s success and culture, and they are the leading innovator in their industry. They invest over $350 million in consumer understanding to determine innovation opportunities. SymphonyIRI’s New Product Pacesetters Report “recognized P&G as the most innovative manufacturer in the consumer packaged goods industry for the last decade” (http://www.pg.com/en_US/company/core_strengths.shtml). How do they do this? They value “big, new consumer innovations,” and Amabile’s article discusses the innovation team that P&G created called Corporate New Ventures. Aside from this specialized unit, P&G as a whole operates according to Amabile’s three components of creativity. They value expertise, evident in hiring less than 1% of the half-million people applying for P&G jobs each year. Their recruiting process “measures intelligence, assesses character and leadership, and predicts success at P&G” (http://www.pg.com/en_US/company/purpose_people/leadership_development.shtml). P&G also fosters creative-thinking skills, as seen in their “innovation centers,” which simulate in-home and in-store environments, enabling employees to solve innovation challenges (2008 Annual Report). P&G not only emphasizes disruptive innovation and creating new ideas and products, but they want employees to continuously evaluate and improve products already on the market through sustained innovation.

P&G is also very focused on Amabile’s most important creativity component – motivating employees. They state, “We challenge P&G people from day one” through hands-on experience (http://www.pg.com/en_US/company/purpose_people/leadership_development.shtml). They match meaningful responsibilities for each employee, which is critical for intrinsic motivation. They stimulate employees’ minds (Florida & Goodnight) by providing technical, functional, and leadership skills training. This training often takes employees into stores or consumers’ houses to truly touch the issue. P&G also stimulates minds by assigning projects that require collaboration within and outside the company. This collaboration requires work-group design (Amabile), which P&G does by valuing differences, believing that “the interests of the company and the individual are inseparable,” and building “confidence and trust across business units, functions, categories and geographies.” Furthermore, P&G seeks to minimize hassles (Florida & Goodnight) by striving to “simplify, standardize and streamline” work. Finally, P&G provides employees with supervisory encouragement (Amabile). Senior executives are mentors and coaches for younger managers, helping them develop necessary leadership skills and planning their careers at P&G (http://www.pg.com/en_US/company/purpose_people/leadership_development.shtml).

Through all of these examples, it is evident that the two theories of leadership is innovation and leadership is culture come into play at P&G, and can be realized in this video by CEO Bob McDonald http://www.pg.com/en_US/innovation/index.shtml. After watching this video, how does P&G’s innovative culture help them achieve their purpose of providing “branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come”?