P&G Emphasizes Premium Strategy in Razor Market

Over the past few years, Proctor and Gamble has struggled with the question of whether to deviate from the premium/differentiation strategy that made it so successful during the first tenure of A.G. Lafley.  When Bob McDonald succeeded Lafley, he deviated from that strategy as he coped with consumers "trading down" to lower-priced rival products and private labels during the recession.  The moves left P&G in danger of becoming "stuck in the middle" - trying to be both differentiated/premium and low cost at the same time.   

The razor market offers an interesting example of this challenge.  Over the past few years, the company's Gillette division has seen a new disruptive threat emerge, in the form of lower-priced competitors such as Dollar Shave Club (see inexpensive YouTube marketing below).  How would P&G respond? It essentially informed customers that they could always use an older version of the Gillette products if they wanted a less expensive option.  However, Gillette chose not to come out with a new low-price product.  Now we learn from the Wall Street Journal that Gillette will push even higher into the premium space with a new high-priced technologically advanced product.   Gillette is counting on some consumers to trade up as they have many times in the past, when the firm has brought out advanced razors.   Is this one step too far, or will consumers be receptive?   It will be interesting to see.   Sometimes, firms facing disruptive threats can "over-shoot" the high end of the market, offering consumers an advanced product that actually exceeds the needs of most people.   On the other hand, going down market with a cheaper product brings its own challenges, as premium players often are not capable of also competing in the low cost segment of the market.   In a way, we should not be surprised by this move from P&G.  Lafley is back as CEO, and he was very successful with this premium strategy in the past. Moreover, the economic recovery may provide perfect timing for a move to push deeper at the high end of the market.  

Do Visual Metaphors Affect our Creativity?

Fast Company's Eric Jaffe writes this week about new research on the relationship between visual metaphors and creativity.   Jaffe first cites a 2012 study by Angela K.-y. Leung and her co-authors.  Here is Jaffe's summary of that study:

Test participants enacted various metaphors for creativity, then took an association test designed to measure original thinking. (For "thinking outside the box," they actually sat outside a box made from PVC pipe and cardboard.) The results showed that embodying metaphorical creativity did, in fact, enhance it.

Jaffe goes on to examine a new study by Alex Marin, Martin Reimann, and Raquel Castaño.   They confirmed that visual metaphors can enhance creativity. However, these authors also found that visual metaphors can have a deleterious effect.   For instance, showing people an image of a burned-out light bulb can decrease their creativity.   Scholars don't know exactly why these visual metaphors affect our thinking, though they have demonstrated their impact.  

What's the implication for practitioners trying to nurture innovation in their companies?  Jaffe suggests that we pay close attention to the environment we create in our workplaces.    If we want a team to brainstorm, we might take care to shape the environment in which they will do their work.   Of course, that emphasis on environment should go WAY BEYOND the placing of appropriate visual metaphors.  It should involve creating a space that has plenty of materials available, as fuel for creative thinking.  It should involve plenty of materials, such as post-its and the like.  It should involve appropriate wall space for displaying ideas, sketches, etc.   We need to think holistically about creating a space that nurtures creativity, rather than simply hoping that a few visual metaphors can have a profound impact.

Lone Genius vs. Creative Collaboration

Ben Waber, president and chief executive officer of Sociometric Solutions, has written a great piece for Business Week. The article is titled, "The Myth of the Lone Genius."   Waber examined the 1,000 most-cited articles from Nature from 2001 to 2010.   Note that Nature is a very prestigious scientific journal.  Check out the two charts he created. 

Source: Business Week

Note, in particular, the right-hand tail on the top chart.  The five ground-breaking, highest impact articles were all co-authored.   Here's Waber's comment: "The five most-cited papers all have multiple authors. These are the papers that change science, that move entire fields—the ones we would expect “geniuses” to write. Except they’re all written by teams."  

Overall, the second charts shows that multiple author papers account for many more citations than single author articles.   We tend to make heroes of the long geniuses, but in today's world, collaboration is often the key to creative breakthroughs. 

Jon Stewart on the GM Crisis

Companies without HR Departments?

The Wall Street Journal reports today on some firms that have chosen to abolish (or never create) human resource departments.   Is that a wise move?   On balance, I would say that it is a risky move to operate without an HR group.  I understand the rationale for some of these firms who choose to eliminate the function.  They want line managers to take more responsibility for talent management duties.   They don't want leaders in the company shunning key people management responsibilities off to the human resource department.   Some firms also become frustrated with the bureaucratic procedures that emanate from some HR departments.  It is true that departments of all kinds begin to take initiatives and create processes simply to justify their existence.   However, I would argue that eliminating the HR department is a giant overreaction.  It is also risky.   Companies can find themselves in legal hot water because line managers do not have specific expertise on people management issues.  The article is worth a read, but I wouldn't want to emulate the extreme actions of some of the firms featured in it. 

Encouraging More Entrepreneurs

Troubling Data about Talent Management & Succession

Stanford's David Larcker, Stephen Miles, and Brian Tayan have written a new article titled "Seven Myths of CEO Succession."  They cite some rather startling statistics about succession.  

Each year, approximately 10 to 15 percent of companies change CEOs either because of retirement, recruitment to another firm, resignation following poor performance, or for health-related issues. For this reason, shareholders expect that companies have a chosen successor identified at all times to immediately assume the CEO position should the need arise. Unfortunately, research data indicates that this is often not the case. According to a 2010 study by Heidrick & Struggles and the Rock Center for Corporate Governance at Stanford University, only 54 percent of companies state that they are grooming a specific successor to the CEO position, and 39 percent claim to have no viable internal candidates to permanently replace the CEO if required to do so immediately. 

Wow... what an indictment of the leaders and the leadership development efforts at many companies! Nearly 4 of 10 firms report "no viable internal candidates."  The data raise some troubling questions.  Are these firms not investing in leadership development efforts?   Or, are they spending unwisely in their efforts to groom future leaders?   Perhaps most importantly, are many firms not holding their senior executives, including the CEO, accountable for developing talented people who can assume top positions in the future?  CEOs and other top leaders should be held responsible for more than meeting financial and non-financial performance targets.  They also need to be held accountable for talent development and succession.   That part of their job helps to insure the long term viability and success of the institution. 

Bryant University ranks in top 50 of Business Week List

I'm very proud that, for the first time, Bryant University cracked the top 50 in the Business Week undergraduate business school rankings!  Moreover, the school stood out on the corporate recruiter rankings - a key element of the BW methodology.  Corporate recruiters ranked Bryant #18 in the nation.  That ranking speaks to the quality of our students, their preparedness when entering the workforce, and the strong work of our career office led by Director Judy Clare.  As parents increasingly ask about the value of expensive college educations, I'm happy to report that we have a strong job placement record and highly satisfied corporate partners.