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At Procter & Gamble, the Innovation Well Runs Dry

The consumer giant pioneered disposable diapers, synthetic detergents, and fluoride toothpaste
At Procter & Gamble, the Innovation Well Runs Dry

For much of its history, Procter & Gamble didn’t just launch new products, it created new product categories, from the first mass-produced disposable diapers to Crest teeth-whitening kits. That’s one reason P&G has more than 1,000 Ph.D.’s among the 8,000 employees at its 26 innovation facilities around the world. “P&G is largely a branded science company,” says Larry Huston, former innovation officer at P&G who’s now managing director of 4inno, a consulting firm.

Lately, though, there’s been a dearth of pioneering brands emerging from the world’s largest consumer-products company. Spending on research and development in fiscal 2012 ended June 30 was $2.03 billion, or 2.4 percent of sales, the same as the prior year and down from 3 percent of sales in 2006. P&G’s most recent homegrown blockbusters—Swiffer cleaning devices, Crest Whitestrips, and Febreze odor fresheners—were all launched at least a decade ago. Says Peter Golder, a professor at the Tuck School of Business at Dartmouth College: “P&G is built on creating new categories, and innovation is in its DNA, but they need to rediscover it.”