Reckitt Benckiser, or RB as it now likes to be called, is no longer be described as the world’s largest maker of cleaning products. RB is now primarily a health and hygiene company. ‘We have a leading position in so-called surface care because we have brands like Harpic and Dettol, but we don’t think of these brands as cleaning products,’ says chief executive Rakesh Kapoor. If you think about Dettol you don’t think about cleaning first you think about hygiene.’
The firm recently acquired the maker of Durex which complements its consumer healthcare brands that include Nurofen and Strepsils. It is making its shift to health and hygiene because throat lozenges, condoms, and headache pills, generate huge brand loyalty and have scope for a rash of spin-off products. Kapoor comes alive when talking about his pipeline of new products. "Innovation, he says, is key to encouraging consumers to use expensive brands rather than cheap private label supermarket items."
Below is an interview with Rakesh Kapoor about Innovation practices at RB.
Why is RB so open in its approach to innovation – at www.rb-idealink.com/ you invite other companies and entrepreneurs to cooperate with you. Why does it work?
As a consumer-driven company, we put consumers at the centre of decision making. Consumers want big brands that keep giving them new and relevant benefits that meet their unmet needs. So we invite ideas, products and technologies from outside.
What are the biggest challenges in taking that approach to getting new ideas? Are there any downsides?
First of all, we don’t rely on external innovation – we have a strong culture of innovation here at RB. But as our objective is to find the best solutions to consumer needs, we want to make sure we’ve looked at opportunities outside the company too. I don’t think every company is willing or able to take this approach. Smart people with ideas don’t want to work within strict processes and hierarchies. They are demanding and want things to happen quickly. We are demanding too and want things to happen quickly. So that makes us good people to work with.
Where do you draw the line between innovation and invention (new technologies and products)? What is the key to using technology in an innovative way?
For me, the difference between invention and innovation is the same as technology and marketing. An invention is interesting only when it has been turned into a motivating consumer benefit. Invention is important though, because great invention can lead to breakthrough solutions to unresolved consumer needs or solutions to needs that consumers have not even articulated yet. Once we have an invention on our hands, we want people who can look at it and say ‘How can I turn this into a consumer solution – and where else could we use that idea?’
Increasingly, consumers are playing a role in innovation at many companies. What is the best way to harvest ideas from them?
At RB, consumers don’t just play a role in innovation – they are our raison d’etre. We are always in touch with our consumers. We listen to them, watch them, interact with them. Then we work out how to take something they do or don’t want and make sure our products deliver it to them. But consumers can only tell you what they’re experiencing and what’s good or bad about it. They can’t tell us how to get what they want. That’s our job – to create solutions that make their lives that little bit better, in a way they feel great about our Brands and reward us with their loyalty.
In a company that follows consumer demand, does innovation become reactive? How do you get ahead of the curve – and could you get too far ahead of demand?
Being close to the consumer doesn’t only mean being reactive. It means listening, watching and then creating ways to meet a need that the consumer has, but may not have articulated yet. If you’re in touch with consumers’ lives, you’re very aware of the life changes they experience over time – like having kids. At this point, the change is not just social or economic. There are psychographic changes too, such as awareness of germs. We ‘stay ahead’ of this by giving young mothers tips on health and hygiene for their families and their homes. Innovating ahead of time is only a problem if the innovation isn’t relevant to consumers yet – or if it’s simply not great value.
RB is a global company with UK headquarters. How does the innovation environment in the UK differ from other places such as the US or India?
We have a significant global marketing organisation in the UK and I see this as a major advantage. We depend on the talent of our people, and their passion for the consumer, to build superior innovations. Being close to London has enhanced our ability to attract and retain a multinational pool of talent. We have people from 48 nationalities working in our office and this diversity is a real strength. Coming from different countries and cultures, they bring a unique perspective on the consumer and our business and challenge each other for the best possible solution.
RB is relatively large – what are the benefits and drawbacks for innovation? Do better resources compensate for being perhaps less flexible than smaller companies?
This is a key issue. Talented people don’t want to work in bureaucracies. They want to work in companies where can get things done. They want an environment where their ideas will be accepted. They want to be given real ownership for their business. This is why we focus so much on our culture. You have to act like a small company. This is why we are a ‘principle’ oriented company, not a process oriented one. Size can give you scale, but for innovation speed is more critical. This is why our culture is absolutely critical to our success.
What is key in creating a culture of innovation? Is it pay and processes or something more? Do reward structures encourage innovation– and if so, what works best?
At RB, it’s all about letting people have ownership of the idea and delivery and not putting too many decision layers in their way. It’s attitude, not process, that drives our innovation. You can’t remunerate for innovation in particular, but you can reward for overall success – in other words the outcome of great innovation. It’s just like entrepreneurs, who make their money by the success of the innovation in the market, not by the number of times they have a go at it. We are very much about pay for performance.
