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P&G's Muddled Messages, And The Need For Corporate Meaning

"To touch and improve lives" is the stated purpose of Procter & Gamble. One has to ask: Doesn’t every company want to improve the lives of its customers, employees, and other stakeholders? Would a company deliberately not want to improve lives? Would they be satisfied if one of their brands' positioning statements was simply to improve lives? Was "improving lives" chosen by committee since it’s so general that it could mean anything to anyone? And why "touch"? It seems so gentle a word, like the words "tiptoeing" or "tapping," almost apologetic in its essence.

In an October interview with Fortune, P&G CEO and Chairman Bob McDonald discussed the financial pressures facing the company and outlined some of his initiatives to address these.

However, this interview raised more issues for me than it did answer or address them. There’s the problem of the multiple messages that employees hear each day. There’s the 40-20-10 plan asking employees to focus on 40 biggest categories/countries, 20 biggest innovations, and 10 emerging markets. Then there’s a message to focus on "discontinuous innovation," in other words, radical or revolutionary innovation. So does that mean only discontinuous innovations will be accepted and funded in the next few years? What about other less radical innovations? Where do they fit? Should employees bother recommending anything less than discontinuous innovation?

Then there’s also the message of the desire to create a "culture of productivity." There’s a productivity plan to save $2 billion a year. Employees are told to focus on innovations and to focus on productivity, which typically translates to asking them to focus on expansion and contraction at the same time, or to focus on both abundance and scarcity. Some employees may think that message of innovation is inspiring, while the message of productivity is constraining (and so 1980s!).

Then there’s the message that the company has to "deliver the plan," which means delivering the financial goals outlined in a plan developed by the executive team and supported by country and brand plans at a lower level. This means working toward the financial goals which will deliver the operating margins and bottom line results that will, in turn, encourage a stronger performance in the stock market. However, our research has shown us that less than 30% of employees are motivated by numbers and specifically the company’s stock price, while 70% need something more, something deeper to inspire them. Day after day, hour after hour, these employees want to know that their efforts are worth more than just "delivering the plan."

And then there’s the message of "reduced enrollment," which means fewer employees in the company. Employees probably work in fear that they may be the next on the list whose goal is to reduce enrollment by 5,700 people. But, of course, stay motivated!

Finally, there’s the problem of "sku explosion." One only needs to visit the Olay beauty section of a neighborhood store to see the lack of focus on this brand. How many products can come under one brand name before the consumer becomes confused, overwhelmed, and stressed by all the choices? Not to overlook the lack of efficiencies in production and distribution.

These issues: a vague purpose statement; multiple messaging; a misplaced dual focus on discontinuous innovation and productivity; a request for a laser focus on delivering the (financial) plan; fear of reduced enrollment; a lack of focus on several brands; and overall financial pressures, all stem from the lack of understanding of what the true meaning of P&G is.

It’s time for P&G to rethink what its one message should be. For an organization known for its superior marketing and business discipline, it’s time for it to focus on one unique and meaningful message. We call this the "meaning message," a concise, commonly understood statement that highlights the true meaning of the organization and which serves to inspire and provide direction. It’s a message that also captures the spirit of the organization.

It’s time to address the dual focus on productivity and innovation. The dual focus on productivity and innovation can be solved by delivering one message: asking employees to focus on a range of innovation or a continuum of innovation—from efficiency innovation (improving what is, including productivity ideas), to evolutionary innovation (ideas that are distinctly new and better) to revolutionary innovation (radically new ideas that dismantle or "disrupt" the structure of the company, category, or marketplace). Each project can be placed where it belongs along the continuum to determine whether the organization is well represented in each category of innovations. One concept, one message.

It’s clear to me that P&G needs meaning, as well as meaningful innovation, and they need it now.

—Elaine Dundon is CEO of the OPA! Center for Meaning and author of The Seeds of Innovation.

[Image: Flickr user Campbell Orme]

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  • Webmaster

    agree with the mixed messages, but do not agree with the statement that the people are not motivated. nevertheless there is some homework to be done by leadership to channel the huge potential and capabilities of the P&G organization to the right direction to achieve faster growth!

  • Opinionscr

    Did you even interview any P&G employees to make those statements? Did you know that P&G has never reduced people without what we call a "package"? and most separations are actually voluntary? The company provides an offer and the ones interested based on the "package" can decide to leave or not. There is no fear, P&G is not like most companies where you come to work one day and you find out there is not a job for you anymore, it treats its employees with the utmost respect I have seen. THAT IS HOW P&G ACHIEVES ITS PEOPLE some research, how does your employer behave? Please

  • Guest

    Sadly, I think this is the story of many more companies than just P&G. Would be great if the author would provide some examples of companies that have good purpose/mission statements. Most I've seen are vague.

  • Louie Chow

    Food for thoughts. And it's quite true that companies of that size and scope is forever difficult to find that one single-minded meaningful message. And then there is the international aspects, how 'to touch and improve lives' resonates in different culture and how they respond to it. Sometimes those 'stated purpose' of a company is mainly talking to shareholders and not necessarily to the consumers or internal staff. I think at the end, a company's over-ridding value and message cannot be summarised by just a tagline or any one form of communication, but through the people they hire, what they champion, and ultimately, the products they delivered collectively. 

  • Colin

    Even after countless rounds of layoffs, this is still a HUGE company. I don't think the competing demands of productivity and innovation are that difficult to reconcile; couldn't the company dictate that 5% of BU staff chase discontinuous innovation, while the rest reign in the issues of SKU explosion and brand overextension? (or some other equally arbitrary breakdown)

    As long as P&G is held hostage by the demands and expectations of its shareholders ("delivering the plan"), the company will more than likely continue on its current trajectory. Argh.

  • Ralf J. Ritter

    Part of the issue is conflicting internal and external communications and an apparent attempt to try and please everyone.