Strategy & Business: What is the role of marketing in innovation here?
Jim Stengel: The role of marketing in innovation is to partner with R&D, with design, and with external agencies, and to be there at the beginning -- not to catch something at the back end, but to be there, up front, co-creating. It's about marrying what is possible with what people want, or what we can give them that they don't know they want, but can come to love.
The primary role of marketing in innovation is to understand your brand's territory. If the brand doesn't understand that, the innovation strategy has nothing to hang on to. If you define that territory right, the innovation stream can be really exhilarating. One example we've used many times: We created the first commercially successful diaper, inventing the category, and we centered the brand territory on a functional benefit -- there are fewer wet bottoms in the world because of us.
We had an entire R&D organization focused on fluid absorption, its speed, [its effect on] skin health, and so on. But then we began listening very closely to the consumers, who told us Pampers meant much more to them than just containment and dryness -- that they really saw Pampers as meaning much more about baby care -- knowing babies beyond diapers. And that really made us think about where we wanted to be, and how moms saw us. We said, "Don't we aspire to be that baby care leader, and really make a key difference with moms and babies?" So the whole equity of the brand -- the territory -- evolved into baby development. You have hundreds of people in R&D, and plants that have tens of millions of dollars invested in them, all organized to make a drier diaper. But when you start to say, "We want to be a brand experience; we want to be there to help support parents and babies as they grow and develop," that creates all sorts of new needs. Babies wear a diaper 24/7 for almost three years -- it needs to be soft and comfortable like clothing and have a design that goes hand in hand with overall performance and consumer satisfaction. Everything starts to change.
The most important thing is that the measurement changed. It's easy to measure if you're drier. But when you ask, "How do we know we're better for a baby's development than our competitors?" -- that means your competitive set changes, your market share changes, what you're looking for in your equity changes. And that's why marketing and deep consumer understanding is central to innovation.
Pampers is a huge brand for us, and it continues to grow. And that new growth started with that change of mind-set. That's been happening across lots of franchises.
In the initial days, people thought we were nuts. How can a diaper help in a baby's development? But actually, when you start to think about it, it starts to orient R&D to say, "How can we help babies sleep better?" Why are we concerned about babies sleeping better? Because sleep is important to brain development. It helps relationship skills. Thinking like that, and decisions made like that, compounded, have a big effect on a business, and the way we're able to help improve life for our consumers.
S&B: Marketing is integrated into the senior management culture of Procter & Gamble. And that positioning, in some ways, makes it easier for you to do your job simply because people throughout the organization know they should pay attention when marketing steps up to the microphone. But there are a number of CMOs at other companies whose influence network is not quite as broad. What advice would you pass on to a CMO who doesn't have the network to support and reinforce the decisions of his or her department?
Mr. Stengel: If you can, make a deal with your CEO: "If you're going to hire me, leave me alone for 90 days and I will come back to you. And if you don't like the agenda I have and what I think we can do for this company, then I'll renege the contract."
Then begin to focus on metrics. Do it for your own personal credibility. You need to show what can be done, what you want to be held accountable for, and how marketing can help the organization achieve it.
But keep coming back to our consumer experience. And keep asking, "What is the state of our business?"
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Edited, excerpted and reprinted with permission from Strategy & Business Media. Copyright 2007, Booz Allen Hamilton Inc.