In a front-page story, The Wall Street Journal reported on the latest iterative product from Procter & Gamble, Tide Evo, super-concentrated two-inch square portions of laundry detergent now taking their place alongside Tide pods. (And many others: there are already no fewer than 48 varieties of Tide). 

I don’t know whether Evo will be a gamechanger for laundry, but it does offer a good excuse to look back at the history of Tide, a unique category monarch. This first synthetic detergent was like, say, Coca-Cola in its rapid ascension to market dominance. But unlike Coke, a rival like Pepsi never rose to challenge it. And unlike Coke, P&G never had to live down a marketing fiasco like New Coke. Tide has a 40 percent share of the laundry detergent market, while other P&G brands add another 20 percent. And its enduring domination reflects an almost 190-year-old corporate culture that has seemed to do almost everything right.

P&G Is Special

P&G is what I have called a deep organization, a 19th-century pioneer of the industrial laboratory that is still spending heavily ($2 billion annually) on R&D. Adding to what makes the case of Tide fascinating as business history, its development was a landmark in the transfer of scientific and technological supremacy from Germany to the U.S.

On the eve of World War I, Germany produced 90 percent of the world’s key chemicals for making dyes. Even the red and blue of the American flag depended on the German chemical industry. And when exports were interrupted by submarine warfare, the resulting shortages proved a wake-up call for the U.S. chemical industry, which shortly thereafter enjoyed an extra bump in the form of access to German patents that were confiscated once the U.S. entered the war in 1917.

German hegemony in chemicals had been a century in the making: Justus von Liebig’s chemistry laboratory at the University of Giessen became a model of academic-industrial cooperation that can be viewed as the inspiration for Stanford University’s lucrative digital-era symbiosis with Silicon Valley. By the early years of the Depression, the colossus of German chemistry was a conglomerate formed in 1925 that united BASF, Bayer, Agfa and Hoechst, each of them a giant in its own right, as IG Farben. (IG Farben, the largest chemical maker in the world, later became notorious for its collaboration with the Nazi regime — and, in particular, as supplier of the poison gas Zyklon B used at Auschwitz.)

IG Farben’s sprawling modernist headquarters in Frankfurt remained the largest office building in Europe until the 1950s. And the long road to Tide Evo began in this building one day in 1931, when a P&G engineer named Robert Duncan, on a mission to troll for new product ideas in Europe, offered a ride home to one of his IG Farben hosts. When he asked if there were any other projects that might be of interest, the researcher mentioned a back-burner initiative begun back in World War I, a substitute for soap that IG Farben had been selling to the textile industry under the brand name Igepon. It cleaned exceptionally well in hard water, but it had only a niche market because the compound was too costly to market as a home laundry cleaner.

Duncan was intrigued and followed up, contacting another German corporation working with synthetic detergents along similar lines and obtaining samples for evaluation. P&G chemists found it promising because the synthetic washed away stains more efficiently than soap. So P&G cannily assembled a portfolio of patents from other firms not in the detergent business that would give it a headstart at development.

When at First You Don’t Succeed …

P&G’s original version, named Dreft, proved ineffective with heavy stains and only found a place in residential laundries as a cleaner safe with delicate fabrics. The firm’s chemists subsequently found that adding sodium phosphates to the formula could remedy this defect. The catches: bringing the improved version to store shelves would require a considerable investment in time and money, and it could end up cannibalizing the market for Ivory flakes and other legacy P&G laundry favorites. But P&G’s CEO William Cooper authorized development with a declaration that launched a thousand B-school case studies: “This may ruin the soap business. But if anybody is going to ruin the soap business, it had better be Procter & Gamble.” 

The development of broadly useful synthetic detergents also turned out to need far more resources to bring to market than eventually budgeted, a bias so common in product development that it has a name: the planning fallacy. As David Byerly, P&G’s key patent developer, pointed out, “for almost 10 years we experimented with the new surface-active agents, the basic cleaning agents of synthetic detergents. By the middle of 1941, we still had not come up with a satisfactory, heavy-duty, non-soap product.” The product that became Tide was nearly dropped.

Only Byerly’s steadfast enthusiasm persuaded his superiors to let him continue quietly on what was called Project X. He labored to overcome the remaining flaws in the formula and eventually discovered that reducing the proportion of the cleaning agent would cure much of what still ailed. 

Project X then began to emerge from its corporate limbo as word of the successful formulation made its way up the hierarchy. Top management finally met to review the project in 1945, 14 years after Robert Duncan’s visit to Germany. They were sold, but faced a quandary.

P&G had perfected the art of the product rollout: blind tests of samples followed by process adjustments, followed by full scale test marketing and more tweaks, and after up to two years, a national launch. But by now P&G executives were so enchanted by Tide’s prospects that they broke with precedent and chose full-scale production and a national launch to prevent Lever and Colgate from getting a leg up in synthetic detergents. The P&G marketing machine took over, choosing the name, the memorable package design, and the taglines. Success exceeded expectations; executives expected sales to be concentrated in hard-water regions, but the product was soon a national favorite. Tide was already outselling P&G’s own market-leading soap-based laundry products by 1949. An icon was born.

Never Underestimate the Role of Chance

The story of Tide as told by the American Chemical Society is at first glance a manual of how to do everything right in developing and marketing household products. It illustrates how a non-technical innovation — the role of brand manager with a staff and responsibility for a single product — cemented the company’s leadership. (A young Harvard graduate, Neil McElroy, proposed the concept of brand management in a 1931 internal memo and went on to become P&G CEO and then U.S. Secretary of Defense.)

Considered more closely, though, the Tide saga has elements not only of foresight and technical competence, but of survivorship bias. Chance played a big part. Without that unplanned auto ride in Frankfurt, Robert Duncan would never have been aware of the beginnings of synthetic detergents as textile industry products. Colgate, Lever or one of the German chemical companies might have beaten P&G to the category and protracted their lead with patents and branding. If Dick Byerly had been more easily discouraged, or if his superiors had not tolerated his continued pursuit of Project X even after it lost C-Suite favor, it might have been abandoned. Last but not least, bypassing established testing schedules might have let some serious flaw slip by unnoticed until the national release. 

Even among industry champions with almost perfect track records, luck inevitably plays a part. And even when a chance insight is followed up, the attitudes of a few researchers and managers can mean the difference between a write-off and a bonanza. This does not diminish the genius of P&G’s distinctive culture. It only means that even in the best organizations, luck remains the secret sauce.