PG.com - R&D's Formula for Success

Company Help

Business Customers:

Professional Services:

Download a Report:

	P&G Innovation
	Building Upon Core Competencies
	Commitment of Top Management
	Effective Human Resources Practices
	Evaluating Risks and Results of Innovation
	R&D Integration Into Business Operations


	An Introduction to the R&D Driving Force
	Management's Financial Commitment to R&D
	Research Involving Animals
	R&D's Formula for Success

P&G Innovation
Procter & Gamble is unique when it comes to innovation. We market products in nearly 50 categories — from laundry products and toothpaste to diapers and bone-disease therapies. The breadth of our business creates opportunities to connect technology across categories in unexpected ways.

P&G innovation focuses on both existing and entirely new products.

Setting new performance standards in existing categories:
Recent examples include Tide® and Ariel compact detergents that remove stains and sanitize laundry while protecting the original fabric colors; Pampers® Rash Guard, the only diaper designed to treat and prevent diaper rash; and Pantene®, Vidal Sassoon and Pert Plus, dramatically improved two-in-one shampoo and conditioner products with superior consumer acceptance versus any competitor globally.

Creating entirely new categories and benefits:
Recent examples include Febreze®, an odor-eliminating fabric spray; Dryel®, a product that allows consumers to clean and freshen "dry-clean only" clothes at home; and Swiffer®, a cleaning system that more effectively removes dust, dirt and hair from floors and other hard surfaces.

P&G's unique innovative capability is based on three key characteristics:

A deep understanding of consumers, their habits and product needs
Capability to acquire, develop and apply technology across P&G's broad array of product categories
The ability to make "connections" between consumers' wants and what technology can deliver

Facts and Figures:

P&G invests 4% of worldwide sales in research and development, ahead of most of its global competitors.

P&G has a world-class global research and development organization, with more than 7,500 scientists working in 22 research centers in 12 countries around the world. This includes 1,250 Ph.D. scientists. For perspective, this is larger than the combined science faculties at Harvard, Stanford and MIT.

P&G holds more than 24,000 active patents worldwide, and on average, receives about 3,800 more patents per year. This makes P&G among the world's largest holders of U.S. and global patents, putting it on par with Intel, Lucent and Microsoft.

P&G was a 1995 recipient of the National Medal of Technology, the highest award the U.S. government gives for achievement in technology. The award recognized the company for creating, developing and applying advanced technologies to consumer products that have helped improve the quality of life for billions of consumers worldwide. P&G remains one of only a few companies to have received this recognition.

P&G Core Competencies Lead to World-Class Technologies:

P&G has more than 200 proprietary technologies in the market today. These technologies are organized into a dozen areas of world-class competencies — areas of unique technology strengths the Company has applied to develop superior products. Examples of these core competencies include: Metal Ion Control — the technology to control metal ions (e.g., calcium and sodium) originated from the Company's need to control the hardness in water to improve laundry cleaning performance. This understanding has been reapplied to other product areas ranging from tartar removal on tooth enamel, to delivering increased bone mass in pharmaceuticals and providing calcium in fruit beverages.

Fats and Oils — A century of technology developments in fats and oils is the basis for product innovation in many product categories including food, personal cleansing, and fabric and home care products. The Company is recognized for its ability to tailor fats into a wide variety of materials. Olean®, the non-caloric fat substitute, is an example of how this competency translates into product innovations.
Surface and Phase Chemistry — Building from its deep knowledge in fats and oils, P&G has also developed a global leadership position in surface and phase chemistry. Proprietary surfactants and emulsifiers are the basis for superior cleaning products, fabric conditioners, two-in-one shampoo and conditioners, cosmetics, and foods.
Absorbent Structures and Materials — P&G's baby care, feminine hygiene and tissue/towel businesses are all based upon world-class capability in absorbent structures and materials. Breakthrough improvements in paper making have created materials that are softer, more absorbent and use significantly less wood fiber.
Perfumes and Odor Management — Applied in products ranging from Tide, Pantene, Downy® and Giorgio of Beverly Hills, P&G is the largest producer and user of perfumes. Scientists have applied this knowledge and technology to proprietary products based upon molecules that actually capture unpleasant human, pet, cooking and smoking odors in products like Febreze and the home dry-cleaning kit, Dryel, that refreshes fabrics without washing.

Building Upon Core Competencies
P&G has strategically directed its growth and maximized its chances of success by leveraging its considerable technical competencies across product categories and national boundaries.

The Company's entry into Food, for example, evolved directly from its soap and candle businesses: With technical competencies in fats and oils, the Company created Crisco®, the first all-vegetable shortening. Similarly, P&G leveraged its knowledge of pulp technologies — which came from years of crushing cottonseeds to produce oils for soap and candles — to create important paper products. And more recently, P&G used one of its Laundry competencies — controlling calcium in hard water to achieve superior cleaning — to create calcium delivery technologies that are being used in food and beverage products and in leading-edge drugs like Didronel®. This ability to transfer knowledge from one business to another has been an extraordinary factor in the Company's growth.

Another factor has been P&G's ability to transfer its expertise from one country to another. In fact, today, P&G products are developed as single global R&D projects. People and resources from technical centers around the world are deployed against a single initiative — often resulting in breakthrough products that are then expanded worldwide with minimal need for local tailoring.

Together, these approaches to technology transfer have enabled P&G to continually improve its superior products — from "home-grown" brands like Tide and Pampers, to brands the Company has acquired, such as Pantene and Folgers®. In every case, P&G's extraordinary R&D organization has played a key role in building some of the world's most successful brands.

Commitment of Top Management
One does not need to look far to witness a variety of contributions to our everyday lives from the talented scientists and researchers, past and present, at P&G. At least one P&G product can be found in virtually every home in the United States, and the Company's products are in 140 countries worldwide. P&G credits its success in product innovation to deeply understanding consumer needs and desires and bringing these to reality through leading-edge science and technology.

First and foremost, top management is totally committed to technological innovation and to a continued emphasis on superior products. The Company's Statement of Purpose summarizes this support. Also, public and private statements from past chairmen of the board and chief executives, as well as the present leader, reiterate the commitment from top management.

For example:

R. R. Deupree, chairman of the board 1948-59, said, "The quiet competition of the laboratory today is key to successful competition and future growth."
John G. Smale, chairman of the board and chief executive 1986-90, told shareholders, "It is our goal to be the world leader in the relevant science and technology for every category in which we compete."
Chairman and chief executive 1990-95, Edwin L. Artzt, stated, "Technology is really what drives our business. For our Company, the main challenge is to maintain an edge in technology."
Mr. John Pepper, our Chairman of the Executive Committee of the Board, put it this way, "People think of P&G as a marketing company, but we are first and foremost a research and development company. R&D is the lifeblood of our business."

Company leaders have not only voiced their support of R&D, but have consistently backed their statements with increasing financial support. Dollar support for R&D at P&G has increased every year since World War II, with sales revenues growing roughly commensurately.

Effective Human Resources Practices
P&G has a long history of human resource practices that have supported high effectiveness in R&D. No factor has played a more important role in the success of R&D at P&G than its record of hiring and retaining some of the most talented people in the industry. Once on board, R&D staff members are rewarded and recognized for their contributions through financial compensation, promotions, freedom to influence project selection and financial support for their projects.

Extensive training programs prepare technical personnel for projects and personal success and keep them up-to-date on the latest technologies. These programs include self-directed training for high-potential junior staff; global training programs on how to manage the innovation process; internal technical symposiums to share knowledge and keep personnel at the forefront of technical disciplines; a worldwide electronic system of communications for sharing knowledge; and a liberal policy for attending outside professional society and other technical meetings.

Evaluating Risks and Results of Innovation
Because not all technological innovations will succeed in the marketplace, P&G has put effective mechanisms in place to manage the development risks and evaluate business results. Clear and measurable criteria for commercial success are explicitly reviewed as a part of project establishment, continuation, capital investment and progression to the market.

Laboratory testing plus extensive consumer and market research are used to control investment risk before committing to test, national and global marketing. All of these mechanisms have been combined into an explicit "Product Launch" system with go/no-go criteria for the various stages.

R&D Integration Into Business Operations
R&D activities are fully integrated into overall business operations rather than operating as an isolated function. Each business unit has its own product development department, which is linked to downstream business needs. R&D is responsible, along with marketing, for conducting research to understand consumer needs. A sub-discipline of R&D called Products Research integrates consumer and marketing input into the technology development process. Together with general management, R&D and marketing establish strategic directions for each of the Company's businesses.

©2008 Procter & Gamble. All claims valid only in the U.S. Terms and Conditions Privacy Statement P&G Links Site Help Site Map Contact Us
P&G Everyday Solutions: Register Modify Profile Unsubscribe P&G Global Operations

We self-certify compliance with: