Companies must innovate in order to keep ahead of their competitors. If an organization wants to create a business strategy that keeps it at the forefront of innovation, it must develop ways of making that strategy work. Being innovative does not just involve using the expertise of market researchers, scientists and product developers to create new products. It also involves using the capabilities of everyone within an organization to generate the processes that help the new product to reach the market quickly and efficiently. It is after all people who innovate and not companies, and they need the right environment, which provides both support and encouragement.
So why are some companies more successful innovators than others? One theory about culture contrasts defender and prospector organizations. The defender culture resists change and favors strategies that provide security. This is usually supported by a bureaucratic style of management. On the other hand, a prospector organization thrives on change and innovation. It differentiates its products in a creative and flexible working regime. This case study focuses upon one such prospector organization - Procter & Gamble. It shows how building an innovative culture has enabled the company to meet wider business objectives and maintain its competitive advantage in a rapidly changing market place.
Procter & Gamble is now a global corporation, serving almost five billion consumers, with operations in 50 countries and products selling in more than 140 countries. With a range of brands as diverse as disposable nappies, snacks, juice drinks, shampoos, laundry deter-gents and feminine protection products - this makes Procter & Gamble one of the world’s largest consumer goods companies.
Globalization and the explosion of technology make it more important than ever for Procter & Gamble to ‘embrace its future’. It has recently been restructured in order to accelerate the creation of new products, speed up decision-making, set goals and stretch targets for developing the business and pro-vide rewards for those who do so. A key element in building an organization that is innovative and competitively further ahead than others is to set clear goals and objectives that help to provide the direction for the organization. Within P&G this is reflected through a series of principles, which underpin how employees work and help to provide a purposeful base for their activities.
Innovation, culture and people
One simple definition of organizational culture is ‘the way we do things around here’. It helps to show what an organization stands for and is reflected through the organization’s actions, rituals, beliefs, meanings, values, norms and language. The ‘human resource’ focus within Procter & Gamble is linked to organizational vitality driven by every department. In removing the barriers that hold people back, it energizes people to use their expertise, integrity, drive and hunger to con-tribute to new product development and serve consumers better. This often involves using their creativity and powers of innovation to go beyond accepted ideas to generate new ways of getting better results. As a result it is accepted that the creative talents and drive of more than 100,000 people within the organization will determine where the organization will make a difference in its global markets.
People are at the sharp end of innovation, not companies. Procter & Gamble’s human resource department has the responsibility for the development and growth of people towards higher levels of skill, competency, creativity and fulfillment, in a way that supports each individual. It sets out to foster individual improvement in the workplace, with the opportunity for enhanced work satisfaction, as each employee is able to make fuller use of his or her skills and abilities. Human resource development seeks to ensure that the right people with the right attitude and skills support...
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