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Procter & Gamble open innovation approach

Presented at the Hands On Open Innovation workshops, this presentation explains why such giant as P&G engages in open innovation. P&G shares its approach to open innovation called Connect & Develop and reveals lessons the company has learned from applying open innovation practices.

More info about the event at http://www.ideonopen.com/events

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Procter & Gamble open innovation approach

  1. 1. The DNA of an open & innovative organisation……
 Open Innovation practice from the biggest consumer products company in the world... Professor Roy Sandbach! David Goldman Professor of Innovation & Enterprise,! Newcastle University! ! IQE Launch event,!
  2. 2. ! ! 80 billion
  3. 3. An innovation journey….. ★ Why bother with innovation ? A few words….. ★ What is proving successful today ? Open & collaborative ★ Some insights on your application of innovation processes……..organisation and people
  4. 4. Why bother ?
  5. 5. Innovation is the key to growth.....or survival...... • Change happens ! • Commodity creeps up on you...and reduces margins ! •Your customers expect you to improve.... ! •You must spread your risk ! •You can get greater value from your core competencies ! •Your product or service will decline
  6. 6. Innovation “matching what’s possible with what’s needed...... to create economic value or social good or both......”
  7. 7. What does this mean in practice ?
  8. 8. The task often seems to be very clear....... • Single minded superior functionality ! ! • Superior Value/Cost ! ! • Reliability
  9. 9. But customers and consumers want more as markets develop...... • Products & services that speak to them as individuals and meet their own personal agenda ! ! • With a sense of differentiation & aspiration...... ! ! • Overall, a combination of the functional and the emotional...in the benefits that they get... ! ! ! • WE CAN ONLY DELIVER THIS KIND OF BUSINESS DEVELOPMENT THROUGH INNOVATION.....from sources inside and outside your organisation.
  10. 10. But How ? 11
  11. 11. In a networked world.... Innovation has no boundaries
  12. 12. To match what’s possible with what’s needed..... ! From anywhere, networked solutions And from creative idea to market implementation With shared risk & reward ! NOT ALL THE BRIGHT PEOPLE WORK FORYOU !
  13. 13. So, What is today’s externally focussed innovation strategy in P&G ? An approach called Connect & Develop………
  14. 14. 2 Million We Need 
 $4 Billion/yr New Sales Generation P&G R&D= 9,000 People Why Open Innovation? There are more than 2,000,000 researchers worldwide in design, technology and business application areas of interest to P&G.
  15. 15. 16 
 And.....Think Broader
 Innovation Dimensions Define product innovation broadly – packaging, engineering, market research, technology, ready-to-products, know- how.. ! Innovate to the heart with design ! ! Innovate in marketing ! Innovate the business model 15
  16. 16. Presentation titlePresentation title A C&D technology example… Pentapeptide technology from Sederma, a small company in France. Olay Regenerist
  17. 17. Flourishing Open Innovation..... Collaboration is today’s key....... Innovation Networking Incentivised competitions Crowdsourced innovations
  18. 18. What have we learnt in applying Open Innovation ?
  19. 19. 1. Drive from the Top 2. Build an Open Innovation Culture 3. Focus the Hunt and organise for it…… 4. Be Where the Action Is 5. Build Knowledge Management Systems 6. Staff for Success 7. Be the Partner We’re Looking For How the organisation can create this open atmosphere for innovation....
  20. 20. Building An Open Innovation Culture • Support Failure • Really Foster Open Communications • Build Process Understanding • Establish Rewards
  21. 21. Be Where the Action Is . . . • Developing markets • Venture capital hotbeds • Social media • SMEs • Academia/Universities • React to changing global landscapes
  22. 22. Build Efficient Knowledge Management Systems •Internally •Externally
  23. 23. Open Innovation Planning • Be clear on core competencies ! • Maintain the core, and don’t lose the fundamentals ! • Be risk averse but watch for change at the boundaries ! • Partner for shared risk and reward ! • Get the right people in the right place ! •Take innovation from the end of the funnel...... !
  24. 24. Staff for Success •Hire the Hunter-Gatherer ! ! •Look for “Serial Innovator DNA” ! •Use experience, in addition ! !
  25. 25. Innovation People • Keep your serial innovators happy ! • Inform, inform, inform ! • Celebrate applied creativity ! • Don’t panic them. Innovation doesn’t like it. ! • Give them time to network………
  26. 26. And just think KEN...... • Knowledge • Expertise • Networks
  27. 27. Open Innovation Pitfalls • Cost, cost, cost...... ! • Short-termism ! • Losing your best people ! • Not enough focus on the core ! • Forgetting competencies
  28. 28. A final thought……with great relevance for innovation today or in 2020……. ! “You don’t always want to be considered the best at what you do. You want to be considered the only one who does what you do.” Jerry Garcia, rock legend, Grateful Dead ! !
  29. 29. Thank you for listening.... ! I would be happy to take questions.... 
 


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