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Creativity and Innovation

By: Steve Herman
Posted: September 3, 2009, from the September 2009 issue of GCI Magazine.

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Henry Ford also serves as an example of what occurs when innovation stops. Ford Motor once controlled 60% of auto sales. But his attitude that “any customer can have a car painted any color that he wants so long as it is black” lost the number one position to General Motors when it made color options available, and Ford’s sales fell to 20% of new car sales in the 1940s.

Procter & Gamble is not only the largest company in the consumer products industry but also one of the most innovative. Incremental innovations constantly add minor improvements to products or processes. Disruptive innovation creates new consumption, transforming current markets or making them obsolete. For example, Tide detergent was disruptive, replacing soap with synthetic detergent. Since World War II, P&G has produced 17 disruptive innovations.

A.G Lafley became CEO of P&G in 2000 and put innovation at the forefront of daily operations. “The consumer-is-boss” was his first rule. Lafley called upon the entire company to offer ideas, setting a goal of 50% of total production for new products and technology to come from outside P&G. Sustainable organic growth, driven by innovation, was a particular priority.

Collaboration is an important role for P&G. Future Works is an example: “Do you have a game-changing product, technology, business model, method, trademark, package or design that can help deliver new products and/or services that improve the lives of the world’s consumers? Do you have commercial opportunities for existing P&G products/brands? If so, we’d like to consider a partnership.”4

The economy can be stimulated to restore stability to the system, but creation and innovation are necessary to return to true prosperity. Everyone, at every level of your company, must get smarter. Now is the time to initiate the evolutionary or revolutionary changes in products and corporations to lay the basis for enduring success. There is no cost to being creative, but there is a tremendous penalty for not encouraging creativity and innovation in every individual and organization.