What can small companies learn from big corporations. In this presentation I share the insights from P&G's Connect and Develop Innovation Method.

1. INNOVATION
What can Smaller companies learn
from the Big Corporations?

2. Corporate Entrepreneurship in
Successful Organizations
Most mature companies have to
produce organic growth year in, year
out.
In the past when companies were
smaller and the world was less
competitive, firms could rely on
internal R&D to drive the growth.

3. Procter & Gamble
• Realized current R & D not
sustaining high levels of
growth.
• Innovation success rate
started to stagnate.
• Around the year 2000, share
prices slid from $118 to $52.
• New technologies started
to put a strain on
innovation budgets.
Pressure form small and nimble competitorsPressure form small and nimble competitors

4. Procter & Gamble
• Mr. Lafley set
a target of
acquiring a 50%
growth level outside
the company.

CEO A.G.CEO A.G. Lafley challengedLafley challenged
his employeeshis employees
to reinvent the company’sto reinvent the company’s
innovation business model.innovation business model.

5. Procter & Gamble
• After this ambitious target was
set by the CEO, P & G created
the connect and develop
innovation model.
• Consumer needs were kept at
the front when developing the
model.

6. Procter & Gamble
• Connect and Develop method
• RADICAL THINKING WAS NEEDED TO
SURVIVE…..
• For generations P & G
created most of its
phenomenal growth from
within by building global
research facilities and hiring
and holding onto the best
talent in the world.

7. Connect and Develop Model
• In this radical model you connect with
external sources of new ideas (such as
universities, government labs, suppliers and
even competitors).
• You then develop these ideas into profitable
new or refined products.
• This is done swiftly and cheaply using your
own firms R&D, manufacturing and
marketing power.

8. Connect and Develop Model
To use C&D:
•
Identify consumer needs.Identify consumer needs.
•Identify adjacencies: How can you
enhance existing brand equity?
e.g P & G introduced Crest whitening
strips to expand on toothpaste.

9. Connect and Develop Model
To use C&D:
• Leverage your networks: Benefit from
both proprietary and open networks.
• Distribute & screen ideas:
Lets internal managers
screen ideas for potential.
Promote openness to external ideas.

10. Procter & Gamble
• Procter & Gamble
showed that the
model was successful.
• 5 years after the
company’s stock
collapse in 2000, the
share price doubled.
• P & G now has a
portfolio of $22 billion
worth of brands.
Source:
pg.com

11. Example of use: The Osaka Connection:Example of use: The Osaka Connection:Example of use: The Osaka Connection:Example of use: The Osaka Connection:
Stain removing sponge discovered by P&G connections in Osaka,
Japan. The resultant product was the Mr. Clean Magic Eraser
which achieved double its projected revenues.
Stain removing sponge discovered by P&G connections in Osaka,
Japan. The resultant product was the Mr. Clean Magic Eraser
which achieved double its projected revenues.
Connect and Develop Model

12. Example of use: The Osaka Connection:Example of use: The Osaka Connection:Example of use: The Osaka Connection:Example of use: The Osaka Connection:
C&D Stages:
2001 – Discover: P&G Japanese entrepreneur discovers
product in Japanese store. Checks potential &
establishes fit with P&G home-care products.
2002 – Evaluate: Entrepreneur sends samples to researchers in
Cincinnati for performance checks.
2003 – Launch: Product packaged as-is and launched nationally.
Researchers join to improve product.
2004 – CoCreate: Then co created Magic Eraser Wheel & Tire and
launched in the US.
C&D Stages:
2001 – Discover: P&G Japanese entrepreneur discovers
product in Japanese store. Checks potential &
establishes fit with P&G home-care products.
2002 – Evaluate: Entrepreneur sends samples to researchers in
Cincinnati for performance checks.
2003 – Launch: Product packaged as-is and launched nationally.
Researchers join to improve product.
2004 – CoCreate: Then co created Magic Eraser Wheel & Tire and
launched in the US.
Connect and Develop Model

13. Procter & GambleProcter & Gamble
• C & D more about finding good
ideas and bringing them in, to
enhance and capitalize on
internal capabilities.
• To do this P & G collaborated
with other organizations and
individuals worldwide.
• Always searching for proven
technologies.

14. Procter & Gamble
Top ten consumer needs:
Once a year P & G ask what
consumer needs would
increase growth by increased
communication.
• These needs lists are then
developed into science
problems to be solved.

15. Procter & Gamble
• Proprietary networks: P & G
rely on several of these to
facilitate connect and develop
activities. The two largest ones
are:
• Technology entrepreneurs
• Suppliers (P & G’s top 15 suppliers have
combined R & D staff of 50,000 that was
capitalized upon.)

16. Inspirational QuoteInspirational Quote
• Don't say you don't have enough
time. You have exactly the same
number of hours per day that
were given to Helen Keller,
Pasteur, Michaelangelo, Mother
Teresa, Leonardo da Vinci,
Thomas Jefferson, and Albert
Einstein.
H. Jackson Brown