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Gillette, Innovation, Big Bets and Software

I was talking to a senior partner at a leading consulting firm today and our conversation sparked this post.  The gist of the conversation was, our consultant opined that a) Gillette was the one of most innovative firms, b)  Managers at Gillette made big bets, including a $200M R&D (author’s note: that led to its Sensor razor introduction in 1989) and c)  big bets power corporate growth.

I spent some time thinking about this.  Is Gillette truly an innovative company?  I never thought Gillette was innovative.  Yes, they got acquired by P&G for a ginormous amount a few years back, but how does adding an extra blade wet or dry, to the razor each year in a near monopoly for shaving facial hair or your armpits really qualify someone as very innovative?  I mean, with all due respect to the R&D talent and management consultant power behind Gillette, it is a company that came up with the Mach3 that was proposed in SNL 1975!

Then, leaving my intuition aside, I searched for what some leading thinkers have to say.  Jim Moran from LEK Consulting has a great post on the subject of big bets, which supports most people’s common sense – “the bigger you are the harder you fall”.  His post Can Gillette Disrupt Itself?  is an excellent exposition of the innovator’s dilemma waiting to happen.

Next I looked at who could be these ‘good enough’ competitors that enter the market for razors way down in the bottom and ultimately displace Gillette.  I found one interesting competitor, the King of Shaves Company based in the UK that is doing exactly that.  This post in The Telegraph gives a balanced view of the subject.

I took another turn and looked at what other Gillette studies are around.  There were quite a few consultant sponsored studies and papers (which do not disclose the principal-client relationship at all) that provided old wine in new bottle models of BCG’s growth share matrix redefined in a granular segment level analysis of premium versus commodity segments.

Yet, all of this fuzz aside, I had three questions in my head: 1) do innovations like blade additions to razors at the expense of huge R&D and marketing costs in near monopoly markets belong in the pantheon of innovations? is there a qualitative/quantitative way to measure these innovations besides the companies own marketing press paid or otherwise 2) Can big bets power corporate growth now and in the future?  3) can the software industry, startup/lean/cloud software that is built on experiments and validating hypotheses continuously in a rapid iterative way, in particular, teach a new way to think about strategy to other industries and by extension big firm consultants?

I will provide my thoughts on all three sets of questions over the next few posts.  We invite readers of OnPM to join the conversation and tell us what you think.  Please comment!  Thank you.

I’ll close out this post with a quote from Gary Hamel on Gillette:

Gillette presents the classic example of innovation as product extension. Gillette used to make razors with one blade, then it made them with two blades, and now it has razors with three blades. That is the all-too-typical view of innovation. And there is nothing wrong with it, except at some point adding another blade is not going to make a substantial difference to how customers perceive the product. More important, this narrow view of innovation is very unlikely to create new markets and new wealth. In today’s economy, it is only radical innovation that will lead to significant growth.

-Prabhakar Gopalan