Continuous innovation – staying ahead through constant reinvention
Continuous innovation is challenging, even for organisations with a good track record. Procter & Gamble’s Pampers story illustrates what happens when the time comes to reinvent your organisation.
As a result of this insight, Vic put the case to senior P&G management that the firm should develop a disposable diaper product.
P&G senior management were actively hostile to this idea. Vic was even threatened with termination of employment on several occasions for “wasting time working on that silly diaper idea”.
But Vic was made of stronger stuff and carried on regardless.
P&G eventually launched Pampers in 1961, and it remains a category leader in a global market that’s predicted to be worth more than $80Bn by 2023.1
Q: Why couldn’t P&G initially see the huge market potential for disposable diapers?
A: They were blinded by the awareness of being a soap company.
This awareness was particularly strong, because P&G was not just any soap company, it was the world’s leading soap company.
And Pampers would contribute nothing to selling more soap. In fact it was highly likely to reduce soap sales, because customers who bought Pampers disposables wouldn’t need to buy any soap for washing diapers.
It’s a safe bet that the head of diaper detergents wasn’t Vic’s biggest fan.
Continuous innovation gets held back by “where’s the soap?” attitudes that reinforce the status quo
As the world’s leading soap company with a 125 year history, P&G’s primary focus was soap. They had a few non-soap products, but soap manufacturing was their raison d’être.
Every organisation has a raison d’être that sustains its status quo. And over time, every organisation develops multiple reinforcements to its status quo.
These reinforcements serve to support and sustain “where’s the soap?” attitudes that blind the organisation to future disruptive innovation opportunities and threats.
The reinforcements to the status quo are both explicit and implicit. Explicit reinforcements are more tangible, which makes them easier to observe and understand. They include:
- the organisation structure;
- the ‘written rules’ of how things get done, including business processes and operating procedures;
- internal metrics and ‘scorecards’;
- formal reward (and punishment) mechanisms.
The tacit reinforcements are more subtle, which makes them harder to identify and interpret. These include:
- the ‘unwritten rules’ that drive what people actually do (e.g. what someone would tell a friend about how to survive and thrive here);
- the dominant prevailing mindsets;
- the perceived logic behind informal rewards (and punishments) ;
- people’s awareness of who they are – individually and collectively.
These explicit and tacit reinforcements interact in complex systemic ways to support, sustain and defend the status quo. They form the equivalent of an immune system, attacking, engulfing and overwhelming innovative behaviours, attitudes and ideas that it regards as ‘alien’.
This innovation immunity can be especially strong in ‘successful’ organisations where people can easily adopt an attitude of “it ain’t broke, so why try to fix it?”.
Continuous innovation honours the past but not at the expense of future new opportunities
Traditional management theory and practice tends to overemphasise the explicit and largely overlook the tacit. That’s unfortunate, because the subtle, tacit role of mindsets, attitudes and awareness are central to innovation and agility.
The way to encourage, enable and embrace continuous innovation is to actively seek out a next-level awareness that honours the past, whilst opening up new opportunities for the future.
In launching Pampers, P&G began to escape the trap of ‘we exist to produce soap for our customers’, allowing it to evolve towards a new next-level awareness that ‘we exist to improve the lives of the world’s consumers’.
Notice how the latter includes, embraces and incorporates the former whilst simultaneously escaping its constraints. 2
- Vic Mills eventually died aged 100 on 1 November 1997. But his legacy lives on both in and beyond the Pampers brand. P&G established the Victor Mills Society in honour of his contribution to innovation, membership of which is P&G’s highest accolade for innovation.
- The organisational awareness that “We exist to do xxx for our customers” is a Seeing-Being Trap of the kind described in this short video.