Procter & Gamble - The more things change, the more they stay the same...

I just read a great article ( P&G: The dawn of a cultural revolution ) about P&G from 20 years ago (March 1998). It truly captures how it felt to be in P&G at that time, and it’s fascinating to look at how much (or maybe, how little) has changed in the intervening two decades. With some small edits and name-changes, the same article could almost be written today. But ironically, as I explain below, maybe that isn’t such a bad thing:

At the time, we were trying to move away from our slow, careful, proven methodology to become an agile company that would be competitive in the constant change and rapid innovation of the coming millennium. (sound familiar??).

The words and intentions of our senior leaders and our youngest employees felt like an irresistible force for change … but they were coming up against the immovable object that was the conservative mentality that had served the company well for more than a century and which our middle-management was very reticent to discard.

In R&D, we were asked to come up with new, breakthrough ideas … but when we did, we were asked, by smart, well-meaning managers, to prove them via the same slow, rigorous procedures we’d always used. Most failed. We were frustrated ...

And yet, maybe history is on the side of those managers – the list of the breakthrough ideas Paul Polman (then the UK General Manager for P&G) mentions does not make happy reading today, most of them have long failed and faded, none of them became the hoped for “next Pampers or Always”. Had we deviated too far from the cautionary model?

There are certainly important lessons to be taken from this.

The most obvious one is that, as Niels Bohr and others have stated, “Making predictions is very difficult, especially about the future.” We can all look back and wonder what we might have done differently, but I don’t think anyone can honestly claim that they knew at the time what we should do differently.

Some of the ideas, like becoming much more externally connected, have proven to be right, but we clearly didn’t get the balance right between agility and caution, eventually leading to a major crisis a few years later, for which then CEO Durk Jager was perhaps unjustly assigned most of the blame. As this article shows, the changes which led to his downfall were already in motion before he took charge.

Today P&G is still struggling with the same problem. The rules have changed somewhat. At least the language has. We work with start-ups and join EU-consortia. We have hackathons and incubation-spaces and LEAN innovation teams who bring new ideas through cycles of rapid prototyping, testing, improvement, … and this is really great - but I remember doing exactly that 20 years ago, making prototypes with glue, surfactant-paste and some fabrics we bought in a drapery, and giving them to families to test for a few weeks. It’s more structured now, but not radically different.

And, while the slow change of pace often frustrated me, maybe it is not such a bad thing.

Compared to 20 years ago, P&G is still here, unlike many of the agile competitors we were trying to imitate. Our shares haven’t been thriving but of late they’ve rebounded. We haven’t had hundreds of breakthrough innovations, but we have had a couple, like laundry Pods, which have revolutionised our biggest category and brought a fantastic benefit to consumers. And these have come not from some rapid innovation scheme, but from some incredible work by some of the best scientists and engineers in the world over many years, to overcome very difficult challenges and deliver an outstanding product with consistently high quality at a remarkably low cost.

Maybe ultimately that is where P&G’s strength really lies.

We can aspire to compete with the start-ups, but we need to remember that most of these start-ups will go out of business, while we need to keep going. We absolutely need to keep looking for breakthroughs, we must be more agile, we need to make decisions faster and cut down on internal bureaucracy and needless delays. But realistically P&G will never be able to compete on agility with companies who risk everything and don’t worry about total failure.

The future success of P&G will probably come from the same strength and strategy that Paul Polman talked about 20 years ago, the ability to “create big technology wins”. Whether it’s Pampers or Tide or Fairy or Pods or Pantene, P&G’s greatest and most enduring successes have been driven by creating products that are just far better than our competitors can create, thanks to the innovation and technical mastery of great engineers and scientists in R&D and Engineering.

Full disclosure: I worked in R&D with P&G until September 2017. I am still a share-holder, and as long as we continue to invest in deep technical mastery in science and engineering to enable us to develop products that are simply better than the others, I will continue to believe those shares represent a great long-term investment.