Leading Constructive Disruption

“Constructive disruption” is a term we’ve been using quite a bit at P&G lately—in fact, we like to say we’re leading our industry in constructive disruption. But what does that mean? And how does it play out day to day?

First, disruption means we’re changing the way we do things—and often changing things in a significant way. And we aren’t disrupting for the sake of change. We’re doing it for the benefit of the Company and in ways that are consistent with our Purpose, Values and Principles. That’s where “constructive” comes in. The idea is we want change in a meaningful way that creates competitive advantage and in a principled way that's sustainable.

We’re leading constructive disruption in every area of our business, from innovation to brand building to supply to digitization and data analytics, among other areas.

We’ve adopted the principles of lean innovation to disrupt the way we innovate and the new approach is delivering significant benefits in time and cost, helping to reduce our learning cycles from months to days. This means that we’re innovating on a smaller scale that allows us to rapidly test and learn from key consumers in target markets, and we’re able to adapt and refine our product offerings meaningfully before we scale up.

Take, for example, P&G Ventures: an internal start-up studio that works with entrepreneurs to create new brands, technologies and business models. We leverage our skills, expertise and proprietary science in collaboration with entrepreneurs that offer insights, tools and resources that complement ours. Brands that are in learning market phases include: Zevo – a safe and effective way to control insects in your home; Opte – a precision skincare technology that digitally scans skin and analyzes complexion to cover imperfections; MetaDerm – a proprietary botanical extract skin care product that helps people better manage their chronic skin conditions and Pepper & Wits – treatment products that help women better anticipate and manage the symptoms of menopause. 

We are reinventing brand building, moving from wasteful mass marketing, to mass one-to-one brand building fueled by data and technology with a propensity focus. Whether it’s the use of data and analytics or the way we work with our agencies, we see a way where we can be more directly involved and take a lot of waste out of the system. And it has disrupted the industry.

For example, Secret is disrupting how we communicate. The brand no longer has an agency of record. The brand team has become its own agency – bringing nearly all advertising creation and media planning in-house. Secret’s approach is disrupting the cost, speed and agility of consumer communication. The new ads are being created at as little as a tenth of the cost of traditional executions. The time from idea to execution has significantly reduced – producing content in under a month versus an average production time of 3 to 5 months. These benefits, combined with in-house media planning, give the brand complete control and flexibility to react in real-time to current events and consumer response to our ads.

We’re also transforming our product supply chain. We’re creating a synchronized network based on real-time demand signals to serve the evolving needs of consumers and customers by encoding market, human, and supply chain behavior and strategies into algorithms using advanced capabilities and analytics.

We’re embracing digitization and data analytics that disrupt all facets of our operations. We are standing up “data hubs” in our business units to capture business-relevant data that employees can access in real-time to make better decisions. For example, we’re using data and analytics to optimize distribution, merchandising, shelf sets, targeted sampling and marketing down at the store level.

And, there’s much more we’re doing across all areas of the value chain. The only things we will not change are our Purpose, Values and Principles and our commitment to winning and delivering results.

I love the term constructive disruption because it implies a bias towards positive action. It’s a strong partner to another term I like very much: “constructively impatient.” Years ago, one of our teams asked me to be patient with them as they worked to deliver better results. I replied that patience wasn’t exactly what they wanted or needed and wasn’t something we could collectively afford. What they actually wanted me to be, and what we all need to be, is be constructively impatient—constructive and respectful, but pressed by a sense of urgency to deliver what’s critical to our mutual success.

The work we’re doing to lead constructive disruption throughout P&G shows that we’re willing to change anything and everything needed to win, and that we continue to embrace the idea of constructive impatience to constructively disrupt.

If you’re interested in learning more, please click here: https://www.pg.com/annualreport2019/index.html#/letter-to-shareowners/disruption/explore