MTBC Innovation Team Gets First-Hand Briefing on P&G’s Winning Innovation Strategy
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On May 14 the MTBC Innovation Team was treated to a roundtable discussion with Paul France, “Technology Entrepreneur” for the consumer brands behemoth P&G. Paul shared the incredible story of how P&G drastically changed its innovation strategy as part of an overall plan to arrest stagnant sales growth and boost an anemic stock price. Innovation Team Tri- Chair Matt Blanton of STARTech helped arrange the visit and believes that P&G could very well have developed an innovation model that other major corporations will be emulating.
It all started when CEO A.G. Lafley took the helm of the $39 billion (sales) maker of Tide, Crest, Pampers and 17 other billion dollar plus household/consumer brands in 2000. Since then, Lafley has turned upside down the insular corporate culture of the 138,000-employee, Cincinnati-based giant and in the process has increased sales to over $68 billion.
The transformation was particularly acute in the R&D area, where Lafley decreed that P&G had to do more with less. That meant establishing the goal of getting 50% of its R&D from the outside as well as outsourcing any internal R&D that the company could not use. Since P&G is involved in 150 scientific areas spread over its 300+ brands, that created quite a challenge.
Part of P&G’s technology acquisition plan is to voraciously scour the internet for the technologies it needs. Sites that P&G’s 60 “Technology Entrepreneurs” like Paul tap into regularly are www.innocentive.com, www.ninesigma.com and www.yourencore.com. Then, as part of the culture-changing incentive structure, P&G’s scientists are rewarded just as generously for finding needed technology elsewhere as they are for developing it in-house.
In addition, P&G’s own R&D efforts, involving 8,500 employees in 20 countries around the world, were organized into 32 “Communities of Practice” in areas such as robotics, packaging and bleach. Those “CoPs” are designed to facilitate the sharing of information internally, and to make sure that occurs, employees’ salary increases and promotions are tied to their participation. P&G also looks to its supplier base for new ideas and technologies. In fact, thus far suppliers have been the most prolific contributor to P&G’s usable R&D inventory.
Paul invites MTBC members who have access to technologies that fit consumer needs, are scalable and offer high-margin returns to contact him through Matt Blanton . The Innovation Team’s next regular meeting is scheduled for 11:30 AM on June 22 at the MTBC offices, and interested MTBC members are invited to participate.