What is Constructive Disruption?
Everyone aims to create positive outcomes from innovation. But what makes it positive? One way to identify constructive disruption, says P&G Chief Brand Officer Marc Pritchard, is that it creates new models that can potentially disrupt your current business and also can grow the overall size of a market.
January 6, 2020
In 1887, a retailer in Chicago carried only P&G products due to the demand for trusted products.
At Signal360 we pay attention when a new catchphrase gains traction in the world of innovation, and doubly so when that phrase can trace its heritage through our very own stage. Such is the case with the seemingly contradictory term, “constructive disruption,” which we first heard uttered at Signal 2019 by P&G’s own Chief Brand Officer Marc Pritchard. Turns out, P&G was using the term for a year prior to that event, including at the company’s investor day in 2018. And the phrase now has a star turn in Pritchard’s 2020 keynote at CES this week.
All of which raises the question: What exactly is constructive disruption?
We’ve all heard — perhaps a bit too much — about the disruption driven by the technology industry. But the externalities of disruption for disruption’s sake have come home to roost for that once high-flying sector. Not all disruption, it turns out, is positive.
As Pritchard points out in his speech, the key to constructive disruption is to rethink every aspect of the value chain, so as to achieve product superiority that drives overall market growth. “Constructive is a carefully chosen word,” Pritchard says. “It’s one thing to disrupt and destroy value…and the last decade is littered with value-destructive disruptions. But the harder task, and our job as market leaders, is to disrupt in a way that drives growth and creates value for the consumers we serve and in the markets in which we compete.”
Stealing market share for market share’s sake is a zero sum game or worse, Pritchard advises. Too many companies have competed on price so as to extract value from current marketplaces. Instead, he says, a business leader’s job is to see around corners and imagine new models that will make the market more valuable. Even if your business has a smaller percentage of that larger market, your business — and the category — will have room to grow.
This isn’t a new concept – P&G has been doing it for decades. Pritchard points out that P&G has consistently and constructively disrupted the laundry market, for example, driving up the overall size of the market five fold, while only gaining five points of share. “If we are constantly innovating, improving our consumer’s life,” he says, “Your brand grows, we grow, and the market grows — which is good for business and for society.”
That’s been the driver of P&G’s success over nearly two centuries: superior products that grow the category overall. And it’s a key reason P&G has such a large presence at CES — which Pritchard has rebranded the Consumer Experience Show. “We are looking,” Pritchard says, “for new ideas, technologies, and partners to help us get and stay in the lead by reinventing innovation and brand building to reinvent the consumer experience.”