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P & G's plans to cut staff, new product initiatives: how will this affect innovation and design?

Posted by: Reena Jana on February 25, 2008

With Procter &Gamble’s announcement that the company will cut 10% to 20% of “initiative development,” i.e., new product development and related marketing programs both globally and regionally, it seems as if innovation might surely be affected.

Is it a smart move to not pursue forward-thinking design during rough times?

Then again, perhaps the decision to slash these areas of P & G might prove to be lead to fresh new initiatives and directions for the corporation.

I keep thinking about books by the likes of Henry Chesbrough, author of Open Innovation and Open Business Models, and a columnist who also teaches at UC Berkeley's Haas School of Management, describe how crises help companies come up with imaginative ways of re-inventing how they generate ideas. In a cost-effective way, of course.

Advertising Age, for example, reported that P & G head A.G. Lafley said that store signage design and other point-of-sale marketing strategies will be handled by a single department for the entire corporation globally. In the past, these were the domain of brands alone.

Perhaps this move might result in a stronger, overall P & G "brand" with a message that might resonate with consumers.

Yes, it's early to predict. But it will be interesting to see if other companies will also slash new product development initiatives. And what this means to innovation and design efforts -- both for the best and for the worst possible outcomes.

Reader Comments

Christa Avampato

February 26, 2008 10:33 AM

I think this is a very positive move for P&G. Design and innovation projects can be expensive and cutting back on the number of initiatives will prompt people within the company to determine whether a new project's juice is worth the squeeze. It will also allow them to focus on the critical few initiatives that will truly drive the company forward as opposed to spreading out the energy, time, and money over numerous ideas. It's all about making choices.

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What comes next? The Bloomberg Businessweek Innovation and Design blog chronicles new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

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