Procter & Gamble’s Radical Strategy of Open Innovation

A New Approach to Innovation

Procter & Gamble launched a new line of Pringles potato crisps in 2004 with pictures and words—trivia questions, animal facts, jokes—printed on each crisp. They were an immediate hit. In the old days, it might have taken us two years to bring this product to market, and we would have shouldered all of the investment and risk internally. But by applying a fundamentally new approach to innovation, we were able to accelerate Pringles Prints from concept to launch in less than a year and at a fraction of what it would have otherwise cost. Here’s how we did it.

The Birth of Open Innovation

In the early 2000s, Procter & Gamble was facing a challenge. We were struggling to come up with new ideas that would drive growth and innovation. We were stuck in a traditional R&D mindset, relying on internal resources and expertise to develop new products. But this approach was slow and expensive, and we were struggling to keep up with the pace of change in the market.

The Decision to Open Up

In 2000, we made the decision to open up our innovation process to the outside world. We recognized that the best ideas often come from outside the company, and that by collaborating with others, we could accelerate innovation and reduce risk. We launched a program called “Connect + Develop,” which aimed to find and develop new ideas from outside the company.

How It Works

Connect + Develop is a collaborative innovation program that brings together Procter & Gamble’s internal experts with external partners, including universities, startups, and other companies. The program is designed to be fast-paced and flexible, with a focus on rapid prototyping and testing.

Results

The results have been impressive. Today, open innovation produces more than 35% of Procter & Gamble’s innovations, and generates billions of dollars in revenue. By collaborating with others, we have been able to accelerate innovation and reduce risk, while also gaining access to new technologies and expertise.

Conclusion

Procter & Gamble’s radical strategy of open innovation has been a game-changer for our company. By embracing collaboration and external innovation, we have been able to drive growth and innovation, while also reducing risk and increasing efficiency. We believe that this approach has the potential to benefit other companies as well, and we are committed to continuing to innovate and improve our processes.

FAQs

Q: What is open innovation?
A: Open innovation is a collaborative innovation program that brings together internal experts with external partners to develop new ideas and solutions.

Q: How does Connect + Develop work?
A: Connect + Develop is a program that connects Procter & Gamble’s internal experts with external partners, including universities, startups, and other companies, to develop new ideas and solutions.

Q: What are the benefits of open innovation?
A: The benefits of open innovation include accelerated innovation, reduced risk, and increased efficiency. By collaborating with others, companies can gain access to new technologies and expertise, while also reducing the costs and complexity associated with internal R&D.