"We had a situation where some of our most creative and innovative people only wanted to work on wild new businesses," Mr. Lafley told analysts in December. Then "I came in, I'd say `congratulations, how would you like to work on Pampers?' Or `your next assignment is Tide."'
Where the more adventurous "discontinuous innovation" was the buzz phrase of choice for P&G under Mr. Jager, the more practical "commercial innovation" is P&G's favored phrase today, encompassing Mr. Lafley's focus on using design and other marketing- and consumer-driven improvements to supplement P&G's traditional obsession with technology.
Mr. Lafley told the analysts that Febreze, which P&G originally viewed more as a fabric-care product, has morphed into an air freshener because that's what its most avid consumers were using it for. Such dives into the psyches of loyal consumers clearly have sped the pace of line extensions.
Under Mr. Lafley, almost all P&G's innovation efforts have been steered toward making its billion-dollar brands even bigger and boosting its sub-billion-dollar brands above that mark. That's a far cry from when he replaced Mr. Jager in 2000.
Then, P&G was preparing to launch into test such new brands as the Juvian home laundry service and Culinary Sol cooking school. With P&G's Secret and Old Spice brands under or imminently facing attack by Unilever's Dove and Axe, P&G was working on development of a new, ultimately never-launched deodorant brand, Tribal Spirits, and OT, a personal-care brand for tween boys that ultimately was spun off to a startup company. P&G's existing brands have flourished under Mr. Lafley. But amid a 2005 new-product program that has largely lacked the big bang of last year's Prilosec OTC or Mr. Clean AutoDry launches, P&G's overall U.S. sales growth in early 2005 has been slowing, according to Information Resources Inc. figures reported by Deutsche Bank.
Mr. Lafley told analysts he still wants one or two major new-product launches annually. But one of P&G's stronger bets for 2005, the Intrinsa female sex-drive patch, faces an uncertain future after P&G withdrew its application for approval from the U.S. Food and Drug Administration after the agency requested more research on the long-term impacts of giving women testosterone.
P&G's pending acquisition of Gillette ensures it should have at least one major product launch by 2006-a new men's razor system that Gillette Chairman-CEO Jim Kilts and Senior VP-Marketing and Strategy Peter Klein have been shaving with for months.