Team members outlining an innovation strategy

Five innovation tactics we learned at P&G

“Big companies can’t innovate.” At Procter & Gamble, we’ve heard this before, and honestly, we had to admit that maybe we weren’t innovating. It’s no secret that large enterprises like us have often struggled to compete at innovation with high-growth startups. 

Did we simply not have the ability to be disruptive? After a lot of reflection and comparison to what we typically see in startups, we developed five principles to ensure we don’t settle into complacency. 

#1: Embrace startup mentality.

As a big company, it’s pretty natural to operate differently than a startup.

Startups: Experimental – Agile – Fast – Lean

Enterprises: Risk Averse – Rigid – Slow – Bloated

The list continues. Obviously, these aren’t all positive qualities, but there’s usually a good reason why some of them fall into place. There’s a lot at stake, and the tried-and-true is very appealing, especially for some of our established brands. It’s natural to lean on what’s already worked.

This is especially true if leadership has those enterprise-type mentalities. So for us to embrace a startup mentality, permission needed to come from the top. 
The list continues. Obviously, these aren’t all positive qualities, but there’s usually a good reason why some of them fall into place. There’s a lot at stake, and the tried-and-true is very appealing, especially for some of our established brands. It’s natural to lean on what’s already worked.

One of the major shifts we made over the last several years was for leaders to encourage every employee to have an eye for innovation in all their work. “Every one of our business units has a process and a team dedicated to upstream innovation,” according to Betsy Bluestone, innovation leader with P&G Ventures.

This expectation doesn’t end with our employees. We also encourage our vendor partners to explore innovative approaches and ideas. Whether they’re agencies, supply chain partners, or manufacturers, we want them to feel empowered to challenge legacy processes and thinking. Hopefully, they benefit most of all.

#2: Create a dedicated innovation unit.

While every brand and business unit is encouraged to innovate, we knew that innovating within current categories would only get us so far. What about all the other categories in which we weren’t playing?

While maintaining our mission of “improving the lives of consumers,” we created P&G Ventures. We needed a dedicated team to innovate and turn big ideas into a reality that could benefit people worldwide. 

We knew this would take broad support, including executives, experienced advisors, and network partners. We also knew it would take focus, so we prioritized seven areas within the CPG space

  • Active aging
  • Non-toxic insect solutions
  • Personal performance
  • Balanced protection
  • Enhanced sleep
  • Women’s wellness
  • Emerging frontiers

Since innovation can come from anywhere, we make sure our eyes and ears are open—and our doors! We seek possibilities from employees, emerging entrepreneurs, budding startups, and independent innovators. We welcome applications for game-changing ideas. We even host global innovation challenges, exploring exciting ideas from participants and, if the partnership seems suitable for both sides, funding them and helping them turn ideas into reality.

#3: Embrace inclusion and diversity.

We don’t know it all. That’s especially true when it comes to discovering and developing new ideas. So, we always make an effort to surround ourselves with people who think, feel, and act differently. By expanding the seats at our table, we can see possibilities we otherwise never would have discovered. 

We’ve done this by proactively hiring, promoting, and forming partnerships with individuals and organizations from diverse backgrounds. To let anyone hold us accountable for that commitment, we have a site where you can track our progress in complete transparency.

For example, since less than 3% of all venture funding goes to female founders, we prioritize female-owned startups. “One of the things we focus on as an organization,” says Bluestone, “is making sure we see diversity in deal flow. We have been very deliberate in partnering with all types of VCs, specifically those whose thesis is to invest in female founders. That’s something entirely authentic to P&G and its commitment to gender equality.”

#4: Co-create brands with the consumer.

In many cases, it’s easy for a big business to try and tell consumers what they should want instead of listening to what they do want. But, as we’ve discovered, we are much better at listening when we have innovation in mind. 

When we launch D2C brands, test quickly, and fail fast, we can pivot strategically based on what we learn from actual consumers. It’s almost like partnering with them!

“The number of experiments you can run in refining your message, pitch, technologies, proposition—there’s no better alternative than direct to consumer,” explains P&G Ventures’ Leigh Radford. “It makes me wonder how I ever did it in the past.”

When we have a product that’s ready to scale, it’s beneficial that we have infrastructure across various retail environments. As long as we make sure that we use a consumer-centric approach to the innovative part of the process, we can ultimately benefit from our size when we’ve created something that consumers do indeed want.

#5: Lean on a network of experts.

Part of innovation is necessarily doing something that we aren’t always good at. And that’s okay! We’re new to it in those early days, so we know we’ll need more than just ourselves. We look to other partners who can help guide us, give us honest feedback, and maybe even tell us that something we thought was a good idea might not be as smart as we were thinking.

We see this in a lot of startup founders. They know their company will only be as successful as the people leading it, so our innovation team looks to imitate a few key principles.

  • Hire people with more experience and different experiences. 
  • Surround ourselves with people who are smarter than we are. 
  • Take the pressure off ourselves to have all of the answers.
  • Form partnerships with individuals and organizations who know (and love to do) all the things we don’t.

“P&G has some of the most respectable marketers in the world,” says Lauren Thaman of P&G Ventures. “But while we’re really good at performance marketing, we had to look externally for partners who were skilled at D2C.” 

It was truly essential for us to have the humility and self-awareness to admit where we needed help. We found value in shifting our mindset from focusing on our advantages as an established company. Instead, we imagined the challenges we would face if we were a growing CPG startup.

  • Navigating manufacturers
  • Cutting production costs
  • Getting in front of retailers and on their shelves
  • Navigating supply chain issues
  • Making sure there are no major legal or compliance red issues
  • Creating packaging that stands out on shelves
  • Breaking into new markets
  • Sourcing sustainable packaging, processes, and vendors
  • Securing patents
  • Creating a genuinely superior product

In looking at the attitudes of entrepreneurs, startups, and inventors, we also found ourselves emulating the fire and commitment that comes from those disrupters. The ones that push forward with the grit, hustle, and laser-focused vision to make their big, world-changing idea happen.

By looking outside of our usual zone, we benefited greatly from experts—both from direct help and from indirect inspiration. 

This is what we call the win/win/win.

Entrepreneurs win when they have the funding, advice, and network support to grow their big idea.

We win when these big ideas help us break into new categories, allowing us to reach new audiences and generate new revenue streams.

And consumers win when innovative products make their lives better. 

For more information about P&G Ventures or a chance to share your game-changing innovation, visit www.pgventuresstudio.com.