The move is a key element in Chairman-CEO A.G. Lafley's drive to make P&G more consumer-focused and less technology-driven. It also owes to the rapid expansion of P&G's beauty-care business via $10 billion in acquisitions over the past three years, said industry executives, though P&G is working hard to bring design sensibility to all its businesses, said Claudia Kotchka, VP-design, strategy and innovation at P&G.
P&G marketing used to focus entirely on advertising to pull consumers, giving short shrift to in-store displays to merchandise products in the store and emphasizing efficiency over aesthetics in packages, said Suzanne Grayson, principal of beauty care consulting firm Grayson & Associates. Now, its focus has shifted dramatically toward what Mr. Lafley calls the "first moment of truth," or winning consumers in the store, with packaging and displays major factors in the outcome. "It's all part of the new Procter & Gamble," said Ms. Grayson.
P&G's design managers are now largely "co-located" alongside R&D and in some cases marketing managers in a company where all three were once literally in separate silos. "Design has always been important at P&G," Ms. Kotchka said. "But now it's expanding into more strategic things by getting involved earlier in the projects."
Ms. Kotchka, appointed two years ago as P&G's first chief design officer, reports directly to Mr. Lafley. She started her career as an Arthur Andersen CPA before heading to P&G for a bigger challenge, working at one point in the 1970s on the Crest brand. Four years ago, she started Tremor, P&G's teen viral-marketing program.
Now, she's shaking up P&G's thinking on design, and evidence of the new sensibility can be found everywhere from the overhaul of P&G's once-fusty, wood-paneled executive floor, to the elaborately decorated wrappers on Tampax Pearl tampons. It's also found in recent top honors at the International Package Awards for Olay Regenerist, as the best-designed new package of 2003 in global health and beauty aids.
"Technology is critically important to P&G and that will not change," Ms. Kotchka said. "This is technology plus. We are really adding design to technology." Competitive advantage comes not just from patents, she said, but also from incorporating design into products, much like Apple, Sony or Dell, she said.
Its shift is also having a big impact on design shops. Independent LPK Design has added 60 designers in Cincinnati, Geneva and San Francisco in the past year, largely to feed P&G's hunger for design. And WPP Group's Landor Associates has grown to 100, up 25% from last year, due to P&G's move, said Phil Duncan, managing director.
The interior design of P&G's legendary 11th floor is one of the more striking symbols of the new thinking. In a change opposed by most senior managers but backed by Mr. Lafley, P&G last year removed thousands of dollars' worth of wood paneling and 19th century paintings. In came modern art, advanced electronics and open work spaces.
Form still follows function-but it's far more user-friendly and visually striking. Global Marketing Officer Jim Stengel's space has a 48-inch plasma TV. Mr. Lafley's has a waist-high desk around the edge, so he can work standing when need be to accommodate his bad back.
contributing: claire atkinson