The Transformation of Procter & Gamble Into a Sustainable Serial Innovator

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The Transformation of Procter & Gamble into a Sustainable Serial Innovator

A New CEO
It is June 6, 2010. A few minutes before a business meeting in California A.G. Lafley, Procter & Gamble´s President – Global Beauty Care and North America receives a phone call from John Pepper, Chairman of P&G. John Pepper gets right to the point: “Are you prepared to accept the CEO job at P&G?” Durk Jager who has been P&G´s CEO resigned the day before after 30 years of service for P&G. Without too many questions A.G. Lafley accepts John Pepper´s offer. He becomes P&G´s new CEO.

What happened under Durk Jager
P&G is renowned for its innovations. Products such as Tide, the first synthetic detergent, or Pampers, the first mass disposable diaper, or Pantene, the first shampoo to provide “salon level conditioning”, have built the reputation of the company. But at the end of the 90s P&G´s leaders are dissatisfied with the company´s growth.

Fig.1: P&G´s net sales development at the end of the 90s

They feel the urge to accelerate the company´s progress in order to achieve the goals that they set in the preceding years: • Double the business in 10 years. • Grow shares in the categories representing the majority of P&G´s volume • Remain consistently in the top third of the group of peer companies in terms of total shareholder return. Jager is pushing his organization for faster, bigger innovations in every part of the business. Stretch goals are being set. Speed and the taking of bigger risks are the order of the day.

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The Transformation of Procter & Gamble into a Sustainable Serial Innovator

Jager who as a Dutchman is the first non-US-born CEO in P&G´s history is a demanding boss who at times can be very critical of P&G´s culture and people who appear too slow and risk-averse to him. In order to spur on disruptive innovation, he installs a generous $ 200 million corporate seed fund. New brands such as Swiffer, the innovative in-between wipe system for wooden

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