Connect and Develop

Inside P&Gs New Model for Innovation

Aashik Ambawat (6) Siddhartha Lodha (32) Rohit Pereira (40) Suresh Bhat (110) Akshita Bhatia (4) Upama Saha (41) Joshi M (22) Malvik Majithia (IB 24)

Consider P&G launched Pringles potato crisps in 2004 with pictures and words on each crisp. Previously, it would have taken 2 years to market and considerable risk and investment internally.
New approach to innovation, accelerated Pringle Prints to launch in less than a year and a fraction of cost.

Make snacks more novel and fun, print images on the Pringles.

The Past
Research & Development

The Present & Future Connect & Develop

Created a technology brief that defined the problems we needed to solve
Circulated it throughout our global networks of individuals and institutions Through European network, small bakery in Italy was discovered that hade developed similar technique for cakes and cookies

Bulk of investment just on developing a workable process

Internal team would have hooked up with an ink-jet company that could devise the process
Then we would have entered into complex negotiations over the rights to use it.

Adapted solution to our needs

Business achieved double-digit growth over the past 2 years (20042005)

Where to Play
Misconception that Connect & Develop is only about outsourcing innovation to low cost providersConnect and develop, by contrast, is about finding good ideas and bringing them in to enhance and capitalize on internal capabilities. (most successful examples are Olay Regenerist, Swiffer Dusters, and the Crest SpinBrush.

Top ten consumer needs

Inquiry led to top-ten-needs list for each business and one for the company overall

i.e. company reduce wrinkles, improve skin texture and tone

Needs lists are then developed into science problems to be solved, often spelled out in technology briefs
(New products of concepts that help us take advantage of existing brand

Adjacencies
equity)

i.e. expanded Crest brand beyond toothpaste to include whitening strips, power toothbrushes, and flosses

Technology game boards

(evaluate how technology acquisition moves in one area might affect products in other categories)

Like a multi-level game of chess Which of our key technologies do we want to strengthen? Which technologies do we want to acquire to help us better compete with rivals? Of those that we

How to Network

Proprietary networks

Technology entrepreneurs

(network of senior P&G people known as 70 technology entrepreneurs. They crate and actively promote external connections to decision makers in P&Gs business units) Suppliers (top 15 suppliers have an estimated combined R&D staff of 50,000. 30% increase in innovation projects jointly staffed with P&G and suppliers researchers)

Open Networks

NineSigma (connect companies with scientific/technical problems with

companies, universities, government and private labs, and consultants that can develop solutions) InnoCentive (similar to NineSigma brokers solutions to more narrowly defined scientific problems) YourEncore (brings people with deep experience and new ways to thinking from other organizations and industries into their own) Yet2.com (an online marketplace for intellectual property exchange. Brokers technology transfers both in and out of companies, universities, and government labs)

When to Engage

Technology Entrepreneurs conduct initial screening Logs product into online eureka catalog

What is it? How does it meet our business needs? Are its patents available? What are its current sales?

Concurrently, Technology Entrepreneurs may actively promote the product to specific managers These managers will assess its alignment with the goals of the business and subject it to a battery of practical questions If the item continues to look promising, it may be tested in consumer panels and if response is positive, moved into product development portfolio Then over to external business development (EBD) group for negotiating, licensing, collaboration, or other deal structures

Words of Warning
Three core requirements for a successful connect-anddevelop Strategy: 1) Never assume that ready to go ideas found outside the company are truly ready to go Dont underestimate the internal resources required Never launch without a mandate from the CEO

2) 3)

Push the culture

Radical change in internal culture

Encourage employees to accept outside ideas Product development - Internal scanning - Look outside - Invent Reward System (speed matters) - Tap best ideas - Shift mind-sets

Adapt or Die
"Connect + Develop has helped deliver some of P&Gs leading innovations, and is critical in helping us deliver on our renewed growth strategy moving forward. Connect + Develop has proven to be a winning strategy, with still more room for growth."
Bruce Brown Chief Technology Officer

"We want Connect + Develop to help deliver a dozen more Swiffer Dusters really breakthrough innovations that change the marketplace, grow a category, and have consumers saying: 'I need this product'.
Laura Becker General Manager Global Business Development and C+D

Learnings from open innovation

Needs Lists Adjacencies

Tech Game Boards

Clearly defined objectives help narrow down the search

Open innovation is kick-started by innovations in networking

Technology Entrepreneurs
Your Encore Suppliers

InnoCentive

Co-creation

NineSigma

Open Networks

Know what you want

Find new ways to discover what you want

Evaluate alternatives strictly

Eureka Catalog Feasibility studies Negotiations: regarding licensing, cross licensing, etc

Launch
Top down company wide strategy

Co-create
Continuous innovation

Complementary P&G Innovation Strategies

User driven innovation:

engaging their customers as co-designers

The Corporate Innovation Fund:

an in-house venture capital firm which hands over successful innovations to the relevant business units in the company.
Innovation Net: to allow users to catalogue, locate and maintain employee knowledge. Enterprise 2.0: This web-based service includes the customer and the suppliers web portals, online hubs for all the interactions with supermarkets, suppliers and technology providers around the world

Dangers of Open Innovation

Lean innovation might become fragile innovation and lead to a progressive loss of internal capabilities to develop their own innovations. Managing the intellectual property and its negotiations High complexity model Identifying the Serial Innovators Subjective evaluations

Open Innovation elsewhere

Audi Production Award GE Ecomagination Challenge Nokia IdeasProject Open Xerox Dell IdeaStorm Vodafone BetaVine My Starbucks Idea Heineken Ideas Brewery