Procter and Gamble Connect and Develop
= example of successfull business strategy based on Open Innovation and Co-Creation processes; an innovation network that taps the creativity and experienceof more than 100,000 customers, former employees, and outside experts.
"The strategy “Connect & Develop” implemented by him had the goal to develop about 50 percent of all innovations outside the company’s own research department. The following restructuring made the company one of the most impressive examples for the enormous potential within the concept of Open Innovation.
Today, more than 35 percent of P&G’s new products in market contain elements originally developed outside of P&G. 45 percent of all initiatives within the product development portfolio possess key elements discovered externally. Through „Connect and Develop“ in combination with other improvements in production costs, design and marketing, the R&D productivity of P&G has been increased by almost 60 percent. The success rate of innovations has been doubled, while the costs of innovations declined. Investments in R&D relative to sales have been reduced from 4.8 percent in 2000 to 3.4 percent today.
Principally it is very easy to summarize P&G’s line of action: building and exploiting innovation networks of all kinds. Today, these networks reach from supplier networks being encouraged to send in new ideas right up to web platforms like NineSigma or Innocentive on which P&G is actively searching for solutions to special problems. This way, P&G does not only fall back upon its 7500 own researchers, but on millions of experts situated all around the world. Furthermore a staff of innovation scouts was installed, searching internationally for new ideas and improvements to existing products." (http://www.openeur.com/blog/en/2006/12/03/pg-%e2%80%93-probably-the-largest-rd-department-in-the-world/)
"One of the leaders in integrating CUSTOMER-MADE into its corporate fabric, P&G, is not slowing down: its Connect + Develop program and other innovation projects now produce more than 35% of the company’s innovations. In fact, R&D productivity at Procter & Gamble has increased by nearly 60%. In the past two years, P&G launched more than 100 new products for which some aspect of development came from outside the company. Among P&G’s most successful connect-and-develop products to hit the market are Olay Regenerist, Swiffer Dusters, the Crest SpinBrush, and the Mr. Clean Magic Eraser (source: HBR, March 2006)." (http://trendwatching.com/trends/CUSTOMER-MADE.htm)