Innovation with Compassion

The global household products industry is under pressure, noted Robert McDonald, chairman of P&G at the World Conference on Detergents in Montreux today. Market growth slowed to 4% in 2009, compared to 5% the previous three years; consumer habits have changed; commodity costs remain volatile and the regulatory environment is difficult to navigate.

Stil, the opportunities for growth are impressive, he noted. India spends just $3 per capita on household cleaning products, while China spends only $6. That’s compared to the U.S. and Western European average of $60—clearly plenty of room to grow.

But in their quest for market share, McDonald urged the audience to consider:

• Power of purpose;
• Responsibility to be a force of good; and
• Take the opportunity to touch and improve the lives of consumers.

According to McDonald, employees want to make a difference in the world through their work—money alone is no longer inspiring in and of itself. The best and brighest employees today want to work for a company that can help improve the world, he insisted.

“We make a profit by improving lives; that’s our business model,” he insisted. “Empathy leads to insights that become new products.”

For example, P&Gers reinvigorated the Pampers diaper brand when they stopped focusing internally and began listening to mothers around the world to find out more about their lives, their hopes and their aspirations for themselves and their children.

Regarding becoming a force for good, MacDonald noted that 51 of the largest economies in the world are corporations—not countries. Therefore, companies have a responsibility to create affordable products that create jobs, pay taxes and improve the lives of consumers. He called on industry to develop transformative innovations that get clothes cleaner and faster. using less time, energy and water.

“When we get it all right, we win, the consumer wins and the industry wins,” he insisted.

He urged the industry to embrace sustainability across the value chain and use life cycle assessment tools to reduce their carbon footprint. McDonald noted that P&G recently rolled out new sustainability goals and that competitors have similar mandates. Working together may help everyone attain the desired outcomes.

Finally, he called for industry to work together to shape regulations so that they are based on sound science and don’t increase costs for consumers.

“We need a focused, collaborative effort,” he concluded. “This is our opportunity and our responsibility.”