How Colgate-Palmolive Is Sparking Innovation Across the Enterprise
Colgate-Palmolive’s work to evolve its innovation process is making headway, as the company looks both internally and externally to propel its digital transformation and seize opportunities beyond core adjacencies.
That’s according to recent remarks by chairman, president and CEO Noel Wallace, who’s put in work since taking the helm 2.5 years ago to change how associates view the innovation process, including developing new incentive structures.
Presented here are his comments from the Barclays Global Consumer Staples Conference, highlighting some of the opportunities the No. 39 consumer goods company views as it continues to navigate the pandemic.
On fostering a growth mindset: As the company evolves beyond just short-term adjacency and channel growth, success has been in part supported by new incentive structures to measure how they’re gaining both incremental and breakthrough innovation across the enterprise.
[See also: Colgate’s One Giant Leap For R&D Will Board the International Space Station]
“That in turn really changes the culture of how people operate and how they think about the businesses. It changes the dialogue that we are having with our trade partners. It allows us to go in and have discussions about expanding the categories, driving value vs. simply short-term opportunities that historically we were focused again. So, I do think part of it is evolutionary, but part of it is really transforming internally how we want to think about innovation and getting the organization and the capabilities to underscore that.”
On propelling digital transformation through its workforce: Wallace, who’s been with the company for over three decades, said that while Colgate-Palmolive has historically been tech-focused, it hadn’t been keeping pace with consumer behavior changes. As a result, the last few years have focused on interweaving its technology foundation throughout the entire company, and while they’ve brought in new talent to serve as a catalyst, it’s more of an example of a “rising tide.”
“We need everyone in the organization, every function, to be digitally savvy, because the whole business needs to migrate in that direction, and we are putting a big bet in terms of how we think about technology and digital applications — to whether it’s R&D and predictive analytics, whether it’s sensor technology or forecasting technology on the manufacturing side, whether it’s new ways of developing innovation with direct-to-consumer, whether it’s how we buy media and target media to personalize it, which some of the Hill’s operations are doing exceptionally well. All of that needs to come together to get people to think very differently.”
On driving progress through sustainability: “Take the recent launches we have had in the U.S. on soft soap tablets. We have taken a clear focus on sustainability and where consumers are evolving there, and we are taking significant water and plastic out of the economy through our tablets launch. … We needed to think about the manual toothbrush segment really differently. … Sustainability afforded us that opportunity. We have launched a brush with an aluminum handle that eliminates 80% of the plastic associated with using the toothbrush in the long term.”
On its shifting China strategy: Colgate China has been a drag on the company’s Asia business for the better part of the last five years, Wallace said, so it’s been moving the business to premiumization, ensuring it has a digitally savvy organization, focusing on e-commerce, and better allocating resources to the cities it wants to address. As a result of these efforts, its combined brick-and-mortar and e-commerce share is up for the Colgate business in China for the first time in many years.
The company also has very aggressive plans for a significant relaunch of the Darlie brand in the back half of the year, and it’s implementing strategies to navigate and capitalize on the new community buying networks that have emerged in the region.
On its burgeoning Hill’s Pet Nutrition brand: The brand’s impact on consumers creates incredible emotional engagement, Wallace noted, and presents strong opportunities for personalized digital engagement — especially given the rapidly growing pet category. As a result, next steps include Colgate-Palmolive making more data-driven decisions about the category and how it works with its trade partners.
“We have got great distribution opportunities, both here in the U.S. and globally, and an incredible pipeline of innovation. So, by and large, it’s about continuing to build the brand, invest behind the growth that we are seeing, be choiceful in the segments that we go after, and likewise be choiceful in how we expand the brand internationally, given the significant opportunities we still see here in the U.S.”
