Why Procter & Gamble Is More Disruptive Than You
Disruptive products come from only two places: dumb luck or a deep understanding of the problems facing a target demographic.
When people in tech talk about disruption and customer development, the typical picture that pops to mind is a couple of plucky young startup founders taking on the dumber, older big company guys and — against all the odds — building something new through deep personal insight that ends up disrupting and destroying the Goliath of the tale. This narrative is so engrained that yesterday’s smexy young startup becomes The Man practically the exact second it achieves mainstream success.
Building products based off personal insights can work well if you’re a fair representative of your target audience — it takes little effort to build a deep understanding of your own problems. This is why you’ll often hear the advice to “build a product that solves a problem you have”.
Of course, many companies at scale can’t depend on their employees to just be the target market. It’s too limiting. When you’re trying to move from hypothesis formation to an optimizable product at scale, you need a tool that can let you enter the minds of target markets that you can’t natively represent to substitute for personal experience.
This is where it helps to have tools that enable hypothesis formation in a systematic way. This is something P&G has done in impressive fashion.
Procter and Gamble really gets disruption. Yes, the guys who make dandruff shampoo, diapers, and laundry detergent and sell ~17% of this stuff through thoroughly uncool Walmart — yes, those same guys are more disruptive than you.
It might sound crazy, but think about it. These guys have been around since 1837. Think the market has changed much since then? P&G hasn’t just survived, but at >$80B in annual revenue, they’ve dominated. You don’t accomplish that without constantly inventing and reinventing products, disrupting yourself and competitors simultaneously. Products like Crest Whitening Strips, Swiffer, and new versions of Tide detergent for markets like India and Mexico are great examples of this disruption in action.
So how does a company of this size stay so disruptive? P&G is dealing with constantly changing consumer needs across many product lines (many of which are customized for local markets). Instead of relying on the personal experiences of their employees, P&G borrows a page from the playbook of anthropologists — they find relevant cultural groups to study and embed their employees where they live for a period of time, participating in their day to day lives to gather holistic data:
Soon after they’re hired, new employees of P&G undergo special cultural training. “They spend a week in a low-income neighbourhood, working in a bodega, a little shop,” Stengel says. “He [the executive] puts an apron on. He works there. He talks to the shop owner. He talks to the people who come in. He becomes part of life.”
Product managers pay a lot of lip service to knowing the customer. But how many of them would spend a week living in Mexico and working at a bodega?
Doing participant observation field work helps the employee develop a deep intuition around target group behavior which has led P&G to unique insights including:
- People cleaning floors would typically sweep up dust and then mop in a laborious 2-step process. Recognizing this led them to the development of the Swiffer, which replaces the two-step process with a single step. This led to $100mm in sales in 1999 and annual sales of ~$500mm.
- Tide detergent was irritating people’s skin in India because 80% of people wash their clothes by hand. P&G developed Tide Naturals in 2009 which cleaned well without causing irritation, leading to significantly increased market share.
This methodology has been around for a while in anthropology circles and is being leveraged successfully by larger companies, but it hasn’t penetrated very far into the tech echo chamber. You can build great intuition around target group behavior if you’re willing to embed yourself in your target demographic’s day-to-day life. The unique insights that result belong to those who are willing to spend the time going deep.
Your product management toolbox probably already includes qualitative techniques such as user interviews and focus groups which are great techniques to refine your hypotheses. Ethnographic techniques complement your playbook. Use them to develop your personal intuition around your target group’s behavior and create new hypotheses — it’ll pay dividends in big swing product ideas later on. If you’re a great observer, even participating in the prison system can lead to business opportunities.
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