Page 1: Introduction
Companies must innovate in order to keep ahead of their competitors. If an organisation wants to create a business strategy that keeps it at the forefront of innovation, it must develop ways of making that strategy work.
Being innovative does not just involve using the expertise of market researchers, scientists and product developers to create new products. It also involves using the capabilities of everyone within an organisation to generate the processes that help the new product to reach the market quickly and efficiently. It is after all people who innovate and not companies, and they need the right environment which provides both support and encouragement.
So why are some companies more successful innovators than others? One theory about culture contrasts defender and prospector organisations. The defender culture resists change and favours strategies that provide security. This is usually supported by a bureaucratic style of management. On the other hand, a prospector organisation thrives on change and innovation. It differentiates its products in a creative and flexible working regime.
This case study focuses upon one such prospector organisation - Procter & Gamble. It shows how building an innovative culture has enabled the company to meet wider business objectives and maintain its competitive advantage in a rapidly changing market place.
AG Lafley, the President and Chief Executive of Procter & Gamble, outlined the importance of innovation to the company. He would like to develop a business in which ‘big ideas attract the capital and talent they need’ and points to the innovation equation:
Procter & Gamble is now a global corporation, serving almost five billion consumers, with operations in 50 countries and products selling in more than 140 countries. With a range of brands as diverse as disposable nappies, snacks, juice drinks, shampoos, laundry detergents and feminine protection products - this makes Procter & Gamble one of the world’s largest consumer goods companies.