CONNECT AND DEVELOP
It's been quite some time since Procter & Gamble has rolled out a blockbuster breakthrough product like Pampers or Tide, but ceo A.G. Lafley thinks it will happen again in his lifetime, reports Anjali Cordeiro in The Wall Street Journal (4/23/08). His optimism is rooted in an innovation initiative P&G calls "Connect & Develop," in which the company solicits "new ideas and inventions from entrepreneurs and others." Says A.G.: "It took us a while to realize this: We are not going to invent or ideate any better than anyone else ... What we are good at is connecting new brands and products with consumers."As a result of this outreach, "more than half of P&G's new products and technologies now come from the outside, up from 15 percent in 2000."
In addition, "roughly 50 percent" of its new products now meet financial expectations, compared to "15 to 20 percent" before the company opened up its innovation process. However (and you knew this was coming), industrywide, there are far fewer new brands introduced these days: "Only six percent of new consumer packaged goods introduced in 2007 were new brands, down from 17 percent 10 years ago, according to market researcher Information Resources."Most of the introductions have been line extensions.
Kimberly-Clark, which also is now using a combination of internal and external resources to foster innovation, acknowledges the drive for big breakthroughs, but a spokesperson also emphasizes the importance of small innovations, as well. And A.G. Lafley, who says that while he hasn't given up on finding another breakthrough like Pampers, notes in his book, "The Game-Changer," that innovation is "a continuous process that includes various aspects of the business that can together help create revenue and profit." That may sound a bit small-bore, but in fact the company's investment in R&D totalled $2.1 billion in 2007.
Source: Reveries Magazine
In addition, "roughly 50 percent" of its new products now meet financial expectations, compared to "15 to 20 percent" before the company opened up its innovation process. However (and you knew this was coming), industrywide, there are far fewer new brands introduced these days: "Only six percent of new consumer packaged goods introduced in 2007 were new brands, down from 17 percent 10 years ago, according to market researcher Information Resources."Most of the introductions have been line extensions.
Kimberly-Clark, which also is now using a combination of internal and external resources to foster innovation, acknowledges the drive for big breakthroughs, but a spokesperson also emphasizes the importance of small innovations, as well. And A.G. Lafley, who says that while he hasn't given up on finding another breakthrough like Pampers, notes in his book, "The Game-Changer," that innovation is "a continuous process that includes various aspects of the business that can together help create revenue and profit." That may sound a bit small-bore, but in fact the company's investment in R&D totalled $2.1 billion in 2007.
Source: Reveries Magazine
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