P&G Connect and Develop – an innovation strategy that is here to stay
Dr. Mike Addison, P&G Global Business Development
One of the greatest challenges facing companies and their leadership today is the range and depth of innovation required to drive both top and bottom line growth. How can we deliver one without a trade-off on the other? For P&G, open innovation has been critical to resolving this dilemma: an innovation strategy we call Connect and Develop.
In 2001 we embarked on our Connect and Develop strategy. At that point, less than 10% of our new initiatives involved external innovation partnerships. We set a goal to increase this to more than 50%. By 2008, that target had been surpassed and Connect and Develop had become a fundamental part of business within P&G.
The deal structures and partners represented a broad spectrum, ranging from working with inventors (e.g. Crest Spinbrush), chemical suppliers (e.g. the pentapeptide at the heart of Olay Regenerist), University spin-outs (e.g. the Bifantis® probiotic used in Align), competitors (e.g. Glad Press n’ Seal developed with Clorox) to forming new businesses with other major organisations (e.g. the joint venture with Inverness Medical that became Swiss Precision Diagnostics).
Now, we’re taking it further. This year we set two even more ambitious goals. By 2015 we want our Connect and Develop programs to deliver $3billion towards the company’s annual sales growth. And we want to be the partner of choice for innovation collaboration.
We have already organised to achieve this. P&G Global Business Development is a new group within the company with dedicated P&G staff in more than 10 countries, all closely connected to our business unit needs and constantly seeking partnerships, innovations and external developments of potential value from outside of P&G.
Febreze is just one Connect and Develop case study. P&G’s newest $1 billion brand, Febreze was introduced in 1998 as a unique product to refresh household textiles. But as this business developed, we saw potential to grow the brand by broadening into the whole arena of air care. Rather than reinventing categories where others had existing expertise, we collaborated with external companies for many additional Febreze products. Today, some of the brand’s most recognized products are Connect and Develop enabled including candles, Home Collections, and Set & Refresh where we worked with Italian company Zobele. Connect and Develop helped Febreze grow globally and become a Billion Dollar Brand.
An open-source model is a tremendous way of increasing our innovation output operating through four major mechanisms:
- 1) It enables innovation in areas beyond our specific areas of expertise. We are currently actively exploring the value of social and mobile media to our brands via experimentation with a number of start ups in this space.
- ;2) It offers access to many, many more innovative ideas which in turn improves the quality of those we choose to take forward to commercialisation. By partnering with University Cork in Ireland we were able to maintain a long term research programme that eventually led to the first probiotic demonstrably effective against irritable bowel syndrome.
- 3) It reduces risks in innovation by transforming potential competitors into collaborators. We had the technology that would transform cling film effectiveness, but Clorox had the resources and market expertise in the food storage category. A collaboration with our R&D with their Sales & Marketing was formed to maximise, then share in the value creation.
- 4) It offers faster monetisation of value. Unicharm did not have the manufacturing, distribution or marketing power to take their hand-held duster into other markets. Working with Unicharm, P&G was able to take the Japanese innovation global under P&G’s established Swiffer brand. Now a market leader, Swiffer Dusters are sold in 15 global markets.
Open Innovation only works when some or all of these four advantages apply to all partners in the collaboration, not only to P&G. Deals only get struck if the proposition is strategically right for both parties and the terms are a win:win for each organisation. Get all this right and our experience suggests yet another benefit: a first deal significantly increases the chances of multiple deals and dramatically reduces the time it takes to get to them.
If you are working on the next big thing with a strong strategic fit with P&G brands and believe a partnership could be of benefit to you and us – then please consider that P&G is ‘Open for Business’ and find out more or contact us through Twitter, online or via the P&G corporate press office.
Dr. Mike Addison P&G Global Business Development
P&G Connect and Develop partnerships
- More than 1,000 active agreements with innovation partners
- Dedicated staff in over 10 countries worldwide seeking partnerships with universities/institutes, sole inventors, emerging companies, SMEs, MNCs and competitors
P&G Connect and Develop products
- Over 50% of P&G product initiatives involve significant external collaboration
- Febreze – P&G’s latest billion dollar brand – relied on Connect and Develop for much of its success
- Olay® Regenerist, Oral-B® Pulsonic® Toothbrush, and Pringles® all bring P&G Connect and Develop to life
P&G Connect and Develop goals
- By 2015, external collaboration programmes to be responsible for more than $3bn per annum in new business
Images (Click to enlarge)
- Dr. Mike Addison, P&G Global
- P&G staff seek partnerships with universities,
institutes, sole inventors, emerging
companies, SMEs, MNCs and competitors
- P&G has more than 1,000 active
agreements with innovation partners
- Over 50% of P&G product initiatives
involve significant external collaboration
- By 2015, P&G intends external collaboration
to be responsible for more than $3bn per
year in new business
- Olay© Regenerist, Oral-B© Pulsonic©
Toothbrush, and Pringles© all bring P&G
Connect and Develop to life
Videos (Click to watch)
- How P&G Connect & Develop open
innovation helped to create Olay Regenerist
- Ashoke Mitra shares P&G's Oral Care
solutions through Connect and Develop
- Alice Burkes shares P&G's Health and
Wellbeing learnings through Connect
- President & CEO, Bob McDonald & Chief
Technology Officer, Bruce Brown talk about
new Connect & Develop goals
- Generations of innovation at P&G