When A.G. Lafley became CEO of Procter & Gamble in 2000, the company had a commercial success rate of 15 to 20 percent. Less than a decade later, P&G’s success rate was up to 50 to 60 percent. The company has only gotten stronger since then.
There’s no mystery to P&G’s rapid growth and continuing success – it all comes down to the diversity management. Lafley’s first decision was to focus on radical innovation. He found that P&G was playing it safe. The company was sticking to what it knew.
To make every employee an innovator, P&G changed its social climate. Now, every employee understands that they’re innovators, no matter what they’re doing. The sales people have a say, the marketing department has a say – everybody has a say. Lafley puts it this way: “Even when you’re operating, you’re always innovating — you’re making the cycles shorter, or developing new commercial ideas, or working on new business models.”
P&G also implemented a “reverse mentoring program”, which allows employees from all levels and departments to serve as mentors to the company’s leaders. These reverse mentors give higher-ups access to fresh perspective they might miss if they’re only hanging out with each other.
P&G rotates senior executives through role of Chief Diversity Officer, keeping a constant stream of fresh perspectives flowing through diversity efforts. Plus, the senior executives gain deeper understandings of diversity management when they fill this role. Diversity management skills are encouraged in all P&G senior executives.
“The Consumer Is Boss”
Of course, diversifying perspectives inside the company isn’t enough. You’re still dealing with people who operate in the same overarching company culture. So P&G looked outside the company for diversity.
One of P&G’s new mottos is “the consumer is boss.” P&G doesn’t see consumers as the people who give them money – it sees them as valuable sources of information. P&G spends time listening to consumers in order to create products that meet their demands. For example, when the company decided it wanted to create a razor for the Indian market, it sent a team of researchers to India to live with Indian men. This gave the company a firsthand look at what Indian men wanted out of a razor. P&G used this experience to create the highly successful Gillette Guard.
When P&G holds focus groups, they use virtual models. That way, when consumers suggest changes they’d like to see, researchers can incorporate these changes into the designs immediately. This creates a conversation between consumers and the company – researchers and consumers can actively collaborate on making the best possible product.
P&G’s Connect + Develop program allows people from outside the company to pitch their innovations via the Internet. Anyone anywhere can be a part of P&G’s innovation. And the company really listens – pitches from Connect + Develop have led to 42 percent of P&G’s new products in recent years.
All of these changes to P&G’s business model align with the tenets of Deliberate Diversity™. P&G opened itself up to fresh perspectives from all levels of the company, as well as from outsiders. Lafely created seven new billion-dollar brands over ten years, and diversity management was at the core of that process. P&G’s diversity is results-oriented – it’s all about finding and developing the best innovations. You can’t argue with the results.