• by Karlene Lukovitz  @KLmarketdaily, October 19, 2009

Procter & Gamble's mantra, "The consumer is boss," has become a part of the fabric of marketing. But there's another related concept that is also critical to the company's successful record of innovation, according to P&G group president, North America Melanie L. Healey.

"You need to be purpose-driven. You need to know what it is that you really want to do for the consumer," she told attendees at last week's Magazine Innovation Summit in New York, the Magazine Publishers Association's new format for its annual conference.

"Having a purpose for the brand and going after it in several different ways is really important" because it inspires passion in the team, she said, "and that, in turn, brings in creativity."

In P&G's feminine care division, for instance, one key purpose defined is to "create life-improving experiences that women live every day, everywhere," Healey said.

The mission provides discipline, as well as creative momentum. "It inspires everything we do. If something doesn't serve that purpose, we don't do it," she summed up.

In this division, the mission helped the team identify ways to communicate that are "really meaningful" to the consumer, Healey said. One of these channels, a Web site that introduces teens to menstrual periods in a positive way (beinggirl.com), has become one of P&G's most successful sites.

Another is "Protecting Futures," a cause-driven program that has involved teenagers and young women in helping P&G and the Center for Gender Equity address the problem of girls in Africa missing school and falling behind in learning for lack of sanitary supplies and hygiene education.

This effort appeals to teenagers' empathy, and has won their loyalty, providing an ongoing communications and outreach vehicle for P&G's Tampax and Always brands.

Healey repeatedly emphasized the importance of putting in place structures and people that provide a balanced environment of discipline and creativity. "You need leaders that inspire and encourage the organization to go after creative solutions that add value for the consumer, but you need structure as well, because otherwise, you end up going after everything," she said.

P&G focuses on three types of innovation, she explained:

• disruptive (changing markets or going after new markets);

• sustaining (adding new value to existing product); and

• commercial (finding new insights that will "unlock growth" without changing the product or packaging).

"You need different forms of organizations and resources, different types of people and even different ways of managing" each type of innovation project, Healey said.

For example, in disruptive innovation, where the risks are very high, "learning and failing and learning again quickly" is extremely critical, she said. "Designing small, nimble organizations that can really nail the opportunity and design around that opportunity" enables the company to "fail cheaply," rather than "spend $500 million around something that's not going to work."

P&G's many different structures for fostering different types of innovation include an entirely separate division, called FutureWorks, dedicated to disruptive innovation; a corporate innovation body made up of board members who vet ideas from employees and reward seed money to those that are deemed potentially valuable; and various "hot houses" for tackling specific areas, such as one devoted to in-store innovations aimed at "transforming the shopping experience."