Innovation Pays Off--P&G Gets Great Earnings.

Posted by: Bruce Nussbaum on August 2, 2006

Evidence is piling up that innovation/design/creativity pay off on the bottom line and Procter & Gamble’s latest earnings are but the latest proof.

Let me quote CBS MarketWatch on this:

“Procter & Gamble Co., the world’s largest consumer products company, said Wednesday that fiscal fourth-quarter net income rose 36%, as new products drove better-than-expected sales growth …”

In issue # 1 of IN—Inside Innovation, we ran a table by Peer Insight that showed companies focussing on consumer experience do better in the stock market than those that don’t. Consumer experience is one of many expressions of innovation. P&G is good at it, good at design strategy and good at innovation. And don’t forget, this is a packaged goods company. It isn’t a hot, high tech startup.

Earnings for US companies for this quarter look they will hit double-digits. That would make it the twelfth (now that’s a funny-looking word) quarter that corporate earnings hit double-digits. We haven’t seen that since the late 50’s, I believe. Not every company is getting those returns, but those innovating appear to be reaping much of the rewards.

If you’re a CEO or a manager—or a designer or an employee—think about that.

Reader Comments

Ken Jarboe

August 2, 2006 3:25 PM

P&G is one of the more design and innovation oriented companies around. Their innovation process was featured in at Congressional briefing luncheon we (Athena Alliance) sponsored in June. A summary of that discussion (which included Roger Martin) and the full text of the remarks can be found at our web site at www.athenaalliance.org

Scott Teger

August 5, 2006 10:52 PM

P&G amazes me on their integration of design into everyday products. Commodities aren't supposed to be glamorous, but somehow they do it. And while 'design' as a feature is something average Joe doesn't usuall directly acknowledge - they involuntarily are drawn to it, everyone wants something that looks as good as it works. (and Target's success attests to that)

For us, as a design focused digital ad agency, incorporating the ROI as part of great design is a must and has become our main mission. Sometimes it means using different technology, materials, or delivery methods - but when you make the connection between good design, and the right price point, customers eat it up and our clients reach their profit goals (and come back to us for more!). And in the case of P&G, they crush expectations!

Clifford Roth band

August 24, 2006 10:07 PM

If one wishes to introduce a new product to the market place,Where do you go without spending your last dollar to some scam artist.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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