P&G pushes new innovation strategy

Procter & Gamble turned aside a board-seat bid by activist investor Nelson Peltz earlier this week after convincing shareholders that the company has changed, but it faces lingering questions of whether it can innovate and create a new generation of blockbuster products.

To address those challenges, the company is now bringing items to the market more quickly and is developing products via smaller and more frequent experiments. That includes changing its packaging. The company created a new film-based container for liquids that weighs half as much as regular plastic. The product took about six months to develop and is now being tested with Amazon.

Procter & Gamble also hired a lingerie designer to create a more feminine-looking version of its Always Discreet absorbent underwear with a lighter, softer fabric.

“It’s quite a shift” in the company’s practices, said Kathy Fish, Procter & Gamble’s chief technology officer. Rolling out more tests and smaller projects — known as lean innovation — is producing results and generating insights that can be extended to other products, she said.

That may help counter criticism of the company. When Peltz announced his bid for a board seat in July, he said Procter & Gamble needed a simpler structure and had trailed its peers in performance. He said the business has failed to keep up with changing preferences and that younger shoppers want smaller brands with compelling stories behind them.

Procter & Gamble has argued that sales growth is stronger when it’s pinned to brands that consumers recognize.