Q: Being innovative does not mean inventing. It means being open to adapting your business model to a changing environment. What is the “language of innovation” in your view?
Hans Dewaele: Innovation has many aspects to it. The one which comes first to the people’s minds is about something that’s totally new to the world. But that’s the rarest innovation. That kind of innovation doesn’t happen so often, be it in our industry or in other industries. An iPhone is not an innovation, it’s an evolution. Other phones had come before it in terms of smart phones, but it took it to the next level. iPad is also an evolution of the phone, making it bigger.
When we look at P&G, there is a lot of innovation that we brought throughout our history, with new-to-the-world type of inventions. They all had the purpose to try to improve the lives of the consumers, to make them more comfortable and easier to do day-to-day things. One of the first things we came up with was “Ivory” soap. The selling line in the 1890s was: “It’s so pure it floats.” The purity of soap was quite new, as opposed to the soap that was homemade by people in those days.
We’ve also come with detergents. What we take today for obvious because we’ve all grown up with, which is powder detergent, is something that was invented by P&G. When it was brought to the market, it revolutionized how people were doing their laundry. I’ve seen people, in the developing world, who were still using homemade soap to do their laundry and beating it up in water to get the stains out. When you see the hard labor that most of the time women have to go through, you understand the concept of making consumers’ lives easier behind innovation.
Q: How does P&G approach innovation?
Hans Dewaele: Innovation is about identifying a need, developing a new product or adapting something, bringing here something that has worked somewhere else. I was here 16 years ago, to help establish the operations of P&G in Romania. Many of the products we brought at that time were new to Romania, although not new to the world. That’s innovation for Romanian consumers. It’s part of the globalization process.
Innovation goes further than bringing new products. It is also about the systems and the processes that you bring. For example, in the 1930s, P&G was the first company to establish brand management. That has been a revolution for the industry. Every company now talks about brand management. It basically meant putting one single person as a general manager for a brand, responsible for it. He had to own it and drive it. That’s now normal practice, it’s standard.
P&G was one of the first companies to provide shares options to its employees in the US in the early 1900s, to help employees be part of the success of the company. That is also innovation.
Innovation can also be simply adapting something that exists somewhere else successful and bringing it here and making it also successful. As an example, when I first came here, in the early 1990s, I came from P&G in Saudi Arabia. One of the successes we had there was door-to-door sampling: taking small samples of our products, knocking at doors and leaving those samples behind with the consumers so that they could try them and, hopefully, be convinced about their performance and buy them.
When we came here, we did the same. But we had to adjust it to the local environment. We also had to know on doors, but first we left some leaflets behind on the doors because people were skeptic. Bringing that type of flexibility was also innovation.
Q: How has people’s behavior regarding FMCG consumption changed during the last few years?
Hans Dewaele: Consumers’ habits evolve, so our job is to stay ahead of them. They have become more sophisticated, because they are used to using a lot of our products. Therefore, they became more demanding in terms of what they want and of the performance they expect in return. They have also become more sophisticated in terms of the choices they have, as we are not the only player, and more information oriented.
If you look at consumers now, before making a decision, they will research a lot. They will try to get opinions from friends and on the internet, in forums or on Facebook.
That is a very new element that obviously didn’t exist 15 years ago.