case study procter & gamble -...

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Case StudyProcter & Gamble



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Procter & Gamble: Innovating InnovationProcter & Gamble is a household name. Or at least, in the business world it is–in actual households, you’re more likely to hear “Crest,” “Tide,” “ Gillette,” “Pampers,” “Olay,” or any other of the thousands of products that make up the P&G family. In 2015, it earned a top spot in Fortune’s Most Admired Companies thanks to its innovation and quality.

How did a small, family-owned soap and candle company come to be one of the world’s biggest consumer products companies? Founded in 1837, the Procter & Gamble story is not a short one, but in all of that time, they’ve worked toward one goal: to make everyday life a little better.i That pursuit led them to embrace innovation long ago, and to continually seek new ways to build better products for consumers.

In the last 15 years, innovation has truly come to the forefront at Procter & Gamble. Former CEO A.G. Lafley instituted a program called “Connect + Develop” that revolutionized the company’s entire strategy.

R&D was no longer the secretive world of lab coats and proprietary formulas. Ideas and capabilities could come from anywhere—even competitors.

More than five years after launching the program, P&G sourced a whopping 50 percent of its innovation from outside the company. Innovation was allowed to run free, and P&G was primed to reap the benefits. P&G is now learning from its successes and failures to find ways to balance openness with appropriate business models.

Today, the company is simplifying its innovation strategy and portfolio in order to focus on the 70 to 80 most successful brands, and have siphoned off 100 of the less lucrative brands. P&G intends to keep its energy and attention dedicated to their top performers, so that they aren’t brought down by sluggish, long-standing brands that don’t add value.

P&G has sales of $70 billion with 21 ‘billion dollar brands’ that reach more than 4 billion consumers in over 180 countries.ii Its market cap is larger than the GDP of many countries.iii Innovation is at its core, and from all accounts, it sounds like they plan to be around for another 179 years.iv

Read on to find out how P&G does it, and learn how you can apply their innovative strategies to create success in your own organization.



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The Four Innovation Capabilitiesfuturethink’s Innovation Case Studies are designed to provide insights on today’s leading innovators. Information about each of the companies we feature covers the four key innovation capabilities: Strategy, Ideas, Process, and Climate.

Set a foundation that defines innovation objectives and mobilizes your efforts. The notion of “serendipitous innovation” is dangerously outdated. The secret to success lies in crafting an action-oriented strategy. It means setting a vision for your company to follow and viewing innovation as an expected result, not a lucky one. Innovation should be handled like any business initiative: with an eye on growth, results, and profit.

Think differently to develop original ideas that drive business value. In today’s economy, the ability to continually fuel innovation is what separates winning organizations from the rest. Idea generation should be managed, purposeful, and clearly linked to business objectives. Leading innovators succeed by balancing out-of-the-box thinking with sound management principles.

Create a streamlined and flexible approach to shepherd innovative ideas to market. The reality in every organization is that money is limited. To make sure you’re spending effectively, you must have a streamlined process for innovation. A good process will help to consistently identify your best projects and enable you to move them forward more efficiently.

Build a thriving work environment that drives innovation across your organization. We live in a world where the new replaces the old very quickly. Only organizations that keep pace with the shifting marketplace will be able to stay ahead. So how do the best companies adapt? They cultivate a climate in which employees are encouraged to innovate in a continuous and consistent manner. The companies that stay ahead have made innovation part of their DNA.

futurethink analysts develop case studies by drawing from a mix of extensive research, by conducting organizational and customer interviews (where possible), and by experiencing first-hand interactions with the organization. We want to thank those individuals who contributed to this case study and provided the information found herein, which made the P&G story so fascinating.

We hope the information contained on the pages that follow offers insights and inspiration for innovation in your organization.



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P&G in CrisisWhen former CEO A.G. Lafley first took over P&G in 2000, the company was in crisis.v His predecessor had served the post for only 17 months, struggling to meet financial goals and make headway in critical markets. What’s more, the company’s stock lost 11 percent of its value during Lafley’s first week on the job.vi It was clear that things needed to change.

A 30-year veteran of P&G, Lafley had vast knowledge of many of the company’s divisions, products, and customers, having held numerous management positions around the globe. He had obviously gained the trust of the company and the board, so perhaps he was just the right person to really shake things up. Looking back on that time, he writes, “Years of success combined with the heady dot-com boom had led us to lose touch, to some extent, with why P&G was in business.”vii

His plan was to refocus the company around key customers and core brands. It wasn’t easy. Naturally there was some shuffling in management, with more than half of the top 30 executives leaving within the first two years of Lafley’s tenure. There was also some rejiggering of the brand portfolio, as Lafley sold off weaker brands in food and beverage, focusing the company on laundry, diapers, feminine products, and hair care.viii

All of this set the stage for what was to be A.G. Lafley’s most famous, most impactful act as CEO of Procter & Gamble: the implementation of the Connect + Develop program.

Connect + Develop: Revolutionizing Innovation at P&GInnovation had long been a source of pride at P&G. But something wasn’t working anymore. An organization with the size and stature of P&G certainly had already filled its labs with top talent and invested heavily in R&D. By 2001, they knew they needed a radical new approach—exactly what Connect + Develop provided.

This new approach became clear when leaders at P&G assessed all of the value that lay outside their own walls. They employed about 7,500 people in R&D; however, there were approximately 1.5 million scientists around the world holding expertise relevant to P&G.ix If only they could somehow tap into that vast network of knowledge.

Connect + Develop was the key. At its core, it’s really just a well-executed open innovation program. It created a process that let ideas, intelligence, and insight flow more freely into and out of P&G. While the potential upside was apparent, it was a bit tough for the organization to swallow due to P&G’s strong “invented here” culture.x Perhaps as a demonstration of how serious they were, leaders set a goal that 50 percent of innovation would come through external collaboration.

P&G is careful to point out that Connect + Develop is a program as well as a mindset.xi Part of the initiative includes a team specifically tasked with utilizing external networks as fodder for business solutions. As far as a mindset, it is the idea that everyone at P&G is responsible for collaborating on innovation.

Our PurposeWe will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.



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Since the launch of Connect + Develop 15 years ago, it’s been an indisputable success. Within just five years, the program reached its goal of 50 percent of innovations being the result of external collaboration. Breakthrough product innovations abound, from Olay Regenerist, the world’s top-selling skin cream, to the Swiffer Duster, the market leader sold in 15 global markets.xii

Partners come in the form of universities, government labs, NGOs, individuals, small- to medium-sized enterprises, and even competitors. More than 2,000 agreements exist between P&G and these external entities.xiii The program has revitalized the global conglomerate, holding it up as a model for organizations around the world to emulate.

Position of LeadershipP&G’s innovation success created strong growth and grew market share for many brands. Here’s a look at some of the facts and figures of one of the world’s largest companies.

Overview:xiv

• Sales: $70.7 billion (2015)

• Employees: 110,000

• Manufacturing sites in 38 countries

• Serves 4.8 billion of the 7 billion people on the planet

• Invests more than $2 billion annually in R&D

Brand Power:xv

• 21 of the leadership brands each generate more than $1 billion in sales annually

• Since the first Pacesetters list, P&G has had 155 products make the top 25 Pacesetters list in non-food categories – more than their six largest competitors combined.

Innovation:• Holds 55,000 active patent filings globallyxvi

• Receives 3,800 new patents each yearxvii

• Has developed more than 2,000 partnerships via Connect + Developxviii

“Innovation is the Cornerstone of Our Success: We place great

value on big, new consumer innovations. We challenge

convention and reinvent the way we do business to better win in

the marketplace.”—“Our Principles,”

P&G Website



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Open Innovation in Action – The Quest for Brilliant IdeasAs mentioned earlier, Connect + Develop is a program as well as a mindset. P&G runs the external program mainly through the website, www.pgconnectdevelop.com, which acts as a portal for the talent inside the company to exchange ideas with all those outside its walls. On the website, potential partners can submit ideas, read through specific needs P&G has outlined (somewhat like specific calls for ideas), and also browse assets that P&G is looking to license.

Submitting Ideas. On www.pgconnectdevelop.com, anyone in the world can submit an unsolicited idea for P&G’s consideration to partner, license, or otherwise use. The site exists in seven languages to reach as broad an audience as possible. They say they are looking for “the next game-changing product, technology, business model or method that can improve the lives of the world’s consumers” that meets one or more of the following criteria.

• My innovation addresses a big, unmet consumer need.

• My innovation offers a superior solution to those currently in use.

• My innovation offers significantly better value to P&G’s consumers.

• My innovation has protectable intellectual property such as a patent.

• I have a game-changing technology or approach.xix

The site receives about 20 submissions every weekday, or more than 4,000 each year.xx Once submitted, the ideas are evaluated within about eight weeks, typically on the basis of a technical review. P&G does insist that ideas submitted are properly patented and protected since submitting the idea does not involve any type of confidentiality agreement on the part of P&G.

P&G Needs. One way to increase the likelihood of an idea being accepted on www.pgconnectdevelop.com is to try to provide a solution to one of P&G’s stated needs. The site lists specific solutions it is seeking across categories, including beauty, household care, and even innovations in manufacturing, retail, and business operations. Each listing includes a brief outlining the specific need in detail, constraints, benefits P&G offers in exchange for submission, and more.xx

P&G Assets. In addition to seeking outside technology to bring into P&G, the company also offers a variety of their own assets for licensing by external partners. Divided into categories that range from aerospace and agriculture to mechanical and medical, each listing contains a detailed outline of benefits and uses of that particular technology.xxi

P&G Co-Creation Channel. This new initiative takes open innovation to the next level. Their Co-Creation Channel is a crowdsourcing platform that runs open innovation contests to co-create with talented individuals around the world. Ideas are evaluated by both P&G and the community through online voting.



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Success Stories: Connect + Develop xxii

Innovation inside and outside of P&G has come together to deliver better products for consumers around the world. The Connect + Develop website features a variety of examples showcasing the program’s success.

Bringing Technology “To” P&G. P&G was on the search for anti-wrinkle technology, and while at a conference in Europe heard about the new peptide technology that became a critical component of the now top-selling Olay Regenerist cream. Technologists from the small French company that developed the technology were invited to P&G to present their data, and the two firms went on to collaborate on other products as well.

Bringing Products “In” to P&G. The product that became Pringles Stix was already in the market in Japan. P&G partnered with the company, which provided the product, and P&G provides the trademark, distribution, and marketing in North America.

Taking Products “Out” of P&G. P&G developed a lint roller that not only removed lint, but added freshness to clothes with special scent-transfer technology. The company had not competed in the market before, so it partnered with oneCARE to gain marketing expertise. oneCARE manufactures, distributes, and markets the Bounce Lint Roller.

Bringing a Trademark “In” to P&G. To make brushing teeth more appealing to kids, P&G “in-licenses” trademarked characters such as Barbie, Hot Wheels, Batman, and Hello Kitty and uses them in toothbrush designs.

Taking a Trademark “Out” of P&G. One angle of Connect + Develop is to search for brand extensions leveraging existing brand equity. CoverGirl Smoochies is a perfect example, partnering with well-established beauty partner, CoverGirl, and technology partner, OraLabs Inc. When novelty lip balms (moisturizing lip balms in fashionable shape and packaging) became a multimillion category overnight, P&G had the product in market in six months, instead of spending the requisite two years if done in house.



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Taking Packaging/Design “Out” of P&G. P&G developed a unique solution for deodorant packaging and began producing it through a supplier. After it appeared in-market, the company received two licensing requests: one from a competitor to use the packaging; the other from a packaging supplier. Both requests were granted, and all parties benefited. The competitor gained sales due to the new package, and paid P&G royalties for permission to use it. The supplier was able to produce larger quantities of the packaging and sell excess inventory, lowering costs for P&G.

P&G and Government. P&G partnered with Oak Ridge National Laboratory, a lab funded by the US Government’s Department of Energy, to access their super computer, “Titan.” Leveraging its data, P&G was able to refine their formula for shampoo brand Heads and Shoulders. They were not the only ones to approach this lab though—General Electric knocked on the same door to make their jet-engine turbines more fuel-efficient and Ford to find new ways to cool car engines.

In 2015, P&G announced a partnership with startup incubator, Brandery. The company will fund two high-potential startups who can demonstrate innovative technology or business model ideas to accelerate quality and speed of critical business opportunities for P&G brands arounds the globe.xxiii

These are just a handful of the many examples of successful partnerships P&G has developed since Connect + Develop has been in place.

Partnering with CompetitorsOne of the more interesting ways the Connect + Develop program has played out is through the development of P&G partnerships with competitors. In search of one solution, P&G discovered a useful technology that didn’t quite fit with their strategy. In the time before open innovation, the technology would have probably sat on a shelf for years until someone found a use for it. But with the ability to search for a viable partner, the company was able to realize greater value more quickly.

P&G researchers working on diaper technology discovered a plastic film technology, which was developed and test-marketed for use in plastic wrap. The company was not ready to dive into the category however, but instead formed a joint venture with one of its biggest competitors in cleaning products: Clorox, which already made Glad, the leading plastic wrap.

The joint venture has proven to be a success, creating revolutionary Glad Press’n Seal wrap. In the first four years after the partnership, total Glad sales doubled, making it a billion-dollar brand. The partnership has led to other products, such as the Glad ForceFlex garbage bags. By contributing strengths to the partnership that their competitor lacked (IP, brand equity, organizational structure, R&D capabilities), both organizations benefit. This example is a hallmark of the sometimes surprising outcomes of open innovation programs. If entrenched competitors can make a partnership such as this work, it’s incredibly encouraging for all other types of organizations.



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Building and Sustaining an Innovation CultureMany of P&G’s successful moves were highlighted in a Forbes article written a few years in to the Connect + Develop initiative.xxiv

• Observe, Don’t Ask: Instead of focus groups, get out there and observe your customers in the real world. For P&G, it was about watching consumers in their homes, doing everyday tasks.

• Expand the Brand: Think of the bigger picture. Pampers changed its mission statement from “we want the driest diapers,” to “helping moms with baby’s development.”

• Cross-Pollinate Teams: Get employees talking to each other. When Crest wanted to develop new flavors, they turned to colleagues in other departments—coffee and shampoos—who were aroma experts.

• Test Less: Reduce time to market and execute better. P&G was able to cut development time in half, without adversely affecting products.

• Focus on Experiences: Remember to consider the user’s full experience with a product. Lafley raised the profile of design and designers at P&G to new heights, deeply involving them with all aspects of development.

• Tailor Offerings to Developing Markets: What’s obvious in one place is not in another. P&G talks to ordinary consumers in each of its markets to gain true insight.

Staying Focused on Internal Capacity for InnovationIn addition to seeking outside partnerships, the company continues to develop talent internally. P&G has established a cross-disciplinary team called LEAP, which is made up of some of its “best minds” from marketing, research and development, technologists, and product designers to develop categories and brands that drive new business.xxv

The company also continues to stay involved in The Clay Street Project, which started off as an off-site experiment outside the P&G General Offices in downtown Cincinnati. Employees would spend from a week up to three months in this creative thinking environment to revitalize brands, create new categories, and inspire culture change.xxvi

It has now spun off into an innovation consulting group, which now not only serves P&G but also non-competitors seeking assistance around more traditional internal ideation efforts.

Consumer-Focused Leadership: A.G. LafleyLafley’s early management career was spent on many trips visiting various countries, stores, and homes to understand what delighted consumers.xxvii This type of curiosity has become an integral part of his leadership—to always innovate to delight the consumer.

This has translated into P&G investing $400 million each year in “foundational consumer research”, conducting over 20,000 studies involving more than 5 million consumers in nearly 100 countries. Their innovation centers provide simulated in-home and in-store environments where P&G teams interact with consumers for days or even weeks at a time.



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Through many years of leadership, Lafley has learned that “Your colleagues and your team watch what you do; they don’t just listen to what you say.” Therefore Lafley constantly practices what he preaches. Whenever he goes overseas, he stops by a store on the first day to shop with consumers—”I could have told my employees ‘the consumer is boss’ a million times, but it wouldn’t have made any difference if that isn’t what [I] did.”xxviii

Challenges Ahead: Talent, Sustainabil-ity, and Disruptive InnovationRegardless of the strong plans for innovation and the palpable optimism at P&G, the company faces several challenges in the short- and long-term.xxix One issue for the behemoth is that about 50 percent of its R&D scientists will reach retirement age over the next couple years. P&G will recruit new talent, but this fact highlights just how much it will need to rely on external partners for innovative ideas.

Sustainability is also a critical topic for P&G. While it presents significant opportunity to innovate and set itself apart as a leader in sustainable practices, it’s not easy to rework an organization that depends so much on packaging and distribution. Their competitor, Unilever, has been quick to take leadership in this area and has been praised for their Sustainable Living Plan.

P&G’s long-term goals are to achieve 100 percent renewable energy use in their plants, 100 percent renewable or recycled materials for all products and packaging, and zero manufacturing and consumer waste going to landfills.xxx These may seem lofty, if not nearly impossible, to the average person. P&G also breaks it down into smaller goals, aiming to reduce greenhouse gase emissions by 30 percent by 2020. Since establishing its goals in 2010, P&G has made considerable progress: there are 70 zero-waste manufacturing sites, and energy consumption, water use, C02 emissions, and truck transportation are all down significantly.xxxi

These include goals such as “develop and market at least $50 billion in cumulative sales of ‘sustainable

innovation products,’ which are products that have an improved environmental profile.” An example is Olay’s packaging. It has moved from bulky “clam shell” packaging to trapped blister-based designs, which has helped Olay reduce millions of pounds of packaging.

Using product development research, P&G scientists created P&G Purifier of Water packets. The size of teabags, one packet can purify 10 liters of water in 30 minutes. P&G has distributed these life changing packets during emergencies for over a decade, providing 9 billion liters of clean drinking water to people in need. There next goal? P&G aims to provide 15 billion liters of clean drinking water by 2020 to reduce illness caused by contaminated water and save lives in developing countries.xxxii

The Future: Fewer, Bigger Innovations

In 2014, P&G responded to investors looking for stronger returns by reducing the number of brands in their portfolio. The company is confident that focusing on cultivating its billion-dollar brands is the key driver of success in a globalized world.

Focusing on The Winning Brands: P&G plans to only keep 65 brands (in 10 categories), those which are leaders in their industries, businesses, or segments and driven significant growth in sales and current profit. In 2016 they will finish siphoning off the 100–110 brands that have declining sales and profits. To put this into perspective, P&G’s 40 largest businesses generate 50 percent of sales and nearly 70 percent of operating profit, and it is this focus on their core businesses that they believe will result in the most growth for the organization.



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Within their brands, P&G is paring down choices for customers. One sixth of Olay products have been eliminated for failing to fit the brand’s antiaging focus. This decision was driven by the belief that giving consumers too many choices can hurt sales rather than boost them. Some analysts say Olay had become complex. A glut of subcategories made it unclear to consumers what the brand stood for. P&G is supporting this transition with in-store marketing changes, such as best seller stickers on their products, and displays that mimic department store counter displays.xxxiii

Keeping it Simple: Not only will they simplify their brand portfolio, but Lafley shares that the supply chain is becoming more simplified. Beginning in North America, manufacturing plants are converting from many single-category production sites, to fewer multiple-category plants. This consolidation, cascaded to other regions in 2015, allowed for greater standardization, speed, and simplification. For the enterprise, the corporate hierarchy has been flattened, and will now operate as fewer business units with each leader reporting to the CEO. This structural change will lead to reduced complexity, and greater accountability for performance and results.xxxiv

Discontinuous Innovation: “Discontinuous innovation” means putting a focus on not just improving products but also coming up with whole new categories for P&G.An example is Tide PODS, which launched into the U.S. in 2012 and has been a runaway success with sales in the US and Canada surpassing $500 million in the first year. This pre-measured laundry packet allows consumers to simply drop them into the wash. Market share for Tide in the laundry segment has since then doubled in the U.S. and has created a new category in laundry.

P&G Fabric Care: P&G is pioneering a 3-Step FiberSCIENCE approach to “clean, protect, and enhance” the clothes their consumers love. Their Fiber

Scientists will focus on not just cleaning consumers’ clothing, using Tide and Downey formulas, but extending garments’ longevity. They will collaborate with cognitive experts to prolonge and improve the multi-sensorial fabric properties that influence people’s perception of their clothes: the look, the feel, and the scent. P&G will create a “like-new” feeling through cleaning invisible stains that cause odors, fiber purification and conditioning, and long-lasting fragrance.xxxv

Gillette Shave Club: When disruptors to the men’s razor market, like Dollar Shave Club and Harry’s, tried to edge into P&G core business they responded with their own subscription service, Gillete Shave Club. They distinguish themselves with their blade durability, claiming they can last a month for men who shave three to four times per week. Competitors, on the other hand, try to get customers in the habit of changing their blades weekly. P&G’s most expensive razorblades cost about $5 per month, making their subscription service the cost effective choice. Since it’s launch, their e-commerce share of blade and razors has increased four percentage points.xxxvi

Banking on the Future: P&G’s partnership with NASA is an example of how P&G is looking ahead to bank on future innovations that could create newfound growth. They are currently studying the properties of their products through experiments in space.xxxvii

P&G hopes that by uncovering new discoveries through experiments like these, they will improve their trusted products adding bigger, better innovations to their portfolio.



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What’s Next for P&G?On November 1, 2015 David Taylor assumed the role of CEO, and was part of Lafley’s porfolio transformation in 2015. He supports Lafley’s vision of a “new P&G”, an organization that will “win consistently, be simpler to manage, and will grow sales faster and more sustainably.”xxxviii Taylor is another P&G “lifer,” now responsible for guiding a huge company who’s competitors are smaller, nimbler organizations.xxxix

Innovation will remain a key growth driver for P&G and Taylor will continue finding new ways to drive this forward. P&G is now focusing on expanding and increasing its share in emerging markets—an opportunity it has not fully pursued in the past, giving competitors such as Colgate-Palmolive and Unilever first-mover advantages.

However, P&G’s 2015 results show that their strategy into emerging markets, which is focused on 10 emerging economies such as Brazil, India, and Turkey, is working. Combined P&G’s retail sales in foreign markets are responsible for 60 percent of FY15 revenue.xl Their consumer-focused approach is showing signs of success—after P&G executives observed an Indian man shaving on the floor of his hut with no electricity, water, or mirror, they created a razor that now represents two out of every three razors sold in India. This razor has one blade instead of the American 2–5 blades for Indian consumers who have thicker hair and oftentimes, no water or electricity. This is an example of how P&G’s emphasis on research can result in fantastic customer-centric products.xli

P&G has built R&D centers all over the world, but recently has stepped up their intentions to create centers that can develop products from start to finish, entirely within their target market. P&G’s Beijing Innovation Center, a $70 million facility opened recently, is just that.

In the U.S., P&G is consolidating its innovation teams, oral and personal health units with its beauty lines, in an expansion of the Mason Business Center. Set for completion in 2018, they hope having such expertise under one roof with boost the beauty business’ performance.xlii

P&G will use their new Singapore Innovation Center to tackle ethnographic research and design efforts around skincare, haircare, and detergents. The facility is equipped with rapid manufacturing technology (supported by 3D printers), which allows P&G to make small batches of products on-site for consumer testing.xliii As P&G moves into emerging markets, it must consciously innovate for consumers at all levels of the economic pyramid. To help researchers gain further insights, they’ve set up rooms that mimic “typical homes in various countries.” Employees here hail from more than 20 countries, and no nationality accounts for more than 20 percent, giving P&G an edge as it seeks to meet the preferences of Asian economies with vastly different lifestyles and customs.xliv

In 2016, the Singapore Innovation Center will launch a grant competition, asking academics to submit ideas for how P&G can leverage 3D bioprinting technology (production of human skins and organs by additive manufacturing). If the submissions are viable, P&G could invest heavily in this cutting-edge technology for commerical skincare products.xlv

Beyond emerging markets, P&G aims to grow its share in all categories and markets, and has built the innovation engine to do so. They’ve done so many things right: instituting a formalized process for collecting ideas, making innovation everyone’s job, leading from the top-down, investing and rewarding innovation—the list goes on. It’s been incredible to see the company bounce back from sluggish growth to charge forward as a revitalized leader that serves as an inspiration to businesses worldwide. With innovation at its core, P&G is poised to create value in big and little ways for generations to come.



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What Can You Learn from P&G?Set a foundation that defines innovation objectives and mobilizes your efforts.P&G is doggedly focused on answering unmet customer needs by partnering with a host of outside partners with different perspectives and expertise. They are constantly finding new ways to share and exchange learnings that are “between and beyond” their normal business practices.

• What are the guiding principles that define innovation for your organization?

• How can you formulate ambitious goals that inspire people both inside and outside your organization?

Think differently to develop original ideas that drive business value. P&G fuels new thinking not just by tapping outside parties, but also by engaging its employees in a myriad of ways: placing technology scouts in markets around the globe; designing ideation centers to intensely focus on idea generation; and creating interactive customer sessions to see firsthand what innovations are needed.

• How are you engaging your employees in the innovation process?

• Are you getting your teams into the market to see what’s new and what’s next?

• What “platforms for discovery” are you creating to aid your innovation efforts?



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Create a streamlined and flexible approach to shepherd innovative ideas to market. Connect + Develop is the centerpiece of P&G’s innovation efforts. This network of resources provides a platform for open collaboration across a range of expertise. The goal is to get ideas from the outside to enhance the existing expertise already inside the corporation.

• How can you tap outside experts to enhance your existing innovation efforts?

• What ideation channels and partnerships are you creating to fill your innovation pipeline?

Build a thriving work environment that drives innovation across your organization. A climate of innovation is palpable at P&G. New product launches and technologies are constantly showcased throughout the organization. Every employee is expected to participate and contribute to innovation efforts. Even the CEO actively participates, contributing ideas and dollars to the effort in a visible way. Here, innovation is the rule, not the exception.

• How do you keep your employees excited and engaged in innovation projects?

• How does leadership show its commitment to making innovation a success?



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RESOURCESBaker, Rosie. “P&G to Triple Rate of Innovation.” (20 November 2012).

The Boston Consulting Group. “Most Innovative Companies 2013.” (2013).

Brown, Bruce. “How P&G Tripled Its Innovation Success Rate.” Harvard Business Review. (2011)

Bussey, John. “The Innovator’s Enigma.” Wall Street Journal (4 October 2012).

Dishman, Lydia. “P&G Expands Experience to Make More Innovative Experts.” Fast Company (March 2013).

Interview with Former Chairman A.G. Lafley on The Meaning of Innovation at P&G. Harvard Business Publishing (September 2012). <http://youtu.be/pOcKqDDIo_g>

“Most Admired 2015.” Fortune. http://fortune.com/worlds-most-admired-companies/procter-gamble-17/

Napolitano, Gabriele. Motivation in the Workplace: A Procter and Gamble Case Study. Babelcube Inc. 2014

Plant, Robert. “Incremental Innovation or Breakthroughs? Consider P&G’s Tide Pod.” The Wall Street Journal (Sept 2013).

P&G 2013 Annual Report: <http://annualreport.pg.com/>

P&G Connect + Develop: <www.pgconnectdevelop.com/>

Quick, Becky. “High-Tech Shampoo, via the Department of Energy.” CNN Money (6 May 2013).

ENDNOTESi www.pg.com/en_US/brands/index.shtml

ii P&G 2013 Annual Report

iii www.pg.com/en_US/company/purpose_people/index.shtml

iv “Procter & Gamble.” PG.com Investor / Shareholder Relations: Current Events, Latest News. (30 Dec. 2014). http://www.pginvestor.com/CorporateProfile.aspx?iid=4004124

v Tichy, Noel. “Lafley’s Legacy: From Crisis to Consumer-Driven.” BusinessWeek (10 June 2009). www.businessweek.com/managing/content/jun2009/ca20090610_248094.htm

vi Byron, Ellen. “P&G’s Lafley Sees CEOs as Links to Outside World.” The Wall Street Journal (23 March 2009). online.wsj.com/article/SB123775694940307601.html

vii Byron, Ellen. “P&G’s Lafley Sees CEOs as Links to Outside World.” The Wall Street Journal (23 March 2009). online.wsj.com/article/SB123775694940307601.html

viii Tichy, Noel. “Lafley’s Legacy: From Crisis to Consumer-Driven.” BusinessWeek (10 June 2009). www.businessweek.com/managing/content/jun2009/ca20090610_248094.htm

ix www.businessinnovationfactory.com/iss/innovators/larry-huston



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x Partnering with the World to Create Greater Value, Connect + Develop Factsheet, P&G.

xi Partnering with the World to Create Greater Value, Connect + Develop Factsheet, P&G.

xii Partnering with the World to Create Greater Value, Connect + Develop Factsheet, P&G.

xiii www.pgconnectdevelop.com

xiv P&G 2015 Annual Report: http://www.pginvestor.com/CustomPage/Index?keyGenPage=1073748359

xv P&G 2015 Annual Report: http://www.pginvestor.com/CustomPage/Index?keyGenPage=1073748359

xvi www.experiencepg.com/jobs/research-development.aspx (2013)

xvii www.experiencepg.com/jobs/research-development.aspx (2013)

xviii “Publications & Patents.” - PG Science. (30 Dec. 2014). http://www.pgscience.com/home/publications_patents.html.

xix http://www.pgconnectdevelop.com/home/submission_criteria.html

xx Hall, John. “P&G CPO Rich Hughes Reflects on a Career in Procurement.” My Purchasing Center. Feb 15, 2014. (Dec 30, 2014). http://www.mypurchasingcenter.com/purchasing/industry-articles/pg-cpo-rick-hughes-reflects-procurement-career/

xxi “P&G Launches Connect + Develop Website.” GCI Magazine (8 February 2013).

xxii www.pgconnectdevelop.com

xxiii “COVERGIRL and OraLabs Meet Novelty Beauty Trend in a Deal Sealed with a Kiss.” 6 July 2015. (30 Dec 2015). http://www.pgconnectdevelop.com/home/stories/cd-stories/20150706-covergirl-and-oralabs-meet-novelty-beauty-trend-in-a-deal-sealed-with-a-kiss.html

xxiv “P&G and The Brandery Partner to Ignite Startups.” 20 March 2015. (30 Dec 2015). http://www.pgconnectdevelop.com/home/stories/other-case-studies/20150320-pg-and-the-brandery-partner-to-ignite-startups.html

xxv Sellers, Patricia. “P&G: Teaching An Old Dog New Tricks.” Fortune (31 May 2004).

xxvi “P&G to Triple Rate of Innovation.” Marketing Week (20 November 2012).

xxvii https://www.pg.com/en_US/downloads/innovation/factsheet_ClayStreet_FINAL.pdf

xxviii Gregersen, Hal. “A.G. Lafley’s Innovation Skills Will Weather P&G’s Storm.” Bloomberg Businessweek (3 June 2013). http://www.businessweek.com/articles/2013-06-03/a-dot-g-dot-lafley-s-innovation-skills-will-weather-p-and-g-s-storm

xxix Kwoh, Lesley. “Former P&G CEO: What Companies Get Wrong.” The Wall Street Journal (4 March 2013).

xxx Ziobro, Paul. “P&G Profits Hurt by Rising Materials Costs.” The Wall Street Journal (28 January 2011). online.wsj.com/article/SB10001424052748704268104576107682847591382.html

xxxi https://www.pg.com/en_US/sustainability/environmental_sustainability/index.shtml

xxxii http://www.pg.com/en_US/downloads/sustainability/reports/PG_2014_Sustainability_Report.pdf



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xxxiii “Procter and Gamble Uses Cleaning Technology to Deliver 15 Billion Liters of Clean Drinking Water by 2020.” 15 Sept 2015. (30 Dec 2015). http://finance.yahoo.com/news/procter-gamble-uses-cleaning-technology-120700665.html

xxxiv Ng, Serena. “P&G Looks to Lift Olay Sales with Fewer Choices on the Shelf.” The Wall Street Journal. 28 Dec 2015. (30 Dec 2015). http://www.wsj.com/articles/p-g-looks-to-lift-olay-sales-with-fewer-choices-on-the-shelf-1451340551

xxxv 2014 Annual Report. (Dec 30, 2014). http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.pdf

xxxvi “P&G Unveils Latest Innovations in Fabric Care Based on Cognitive Science.” 14 Jan 2015. (3 Dec 2015). http://www.marketwatch.com/story/pg-unveils-latest-innovations-in-fabric-care-based-on-cognitive-science-2015-01-14

xxxvii Ziobro, Paul. “P&G’s Gillette Sues Dollar Shave Club.” 17 Dec 2015. (30 Dec 2015). http://www.wsj.com/articles/p-gs-gillette-sues-dollar-shave-club-1450371180

xxxviii http://news.pg.com/blog/com pany-strategy/taking-innovation-out-world (26 March 2013)

xxxix 2014 Annual Report. (Dec 30, 2014). http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.pdf

xl “ P&G Names David Taylor as CEO.” 29 July 2015. (3 Dec 2015). http://www.wsj.com/articles/p-g-names-david-taylor-as-ceo-1438120507

xlvi “2015 Annual Report.” (3 Dec 2015). http://www.pginvestor.com/Cache/1001201800.PDF?O=PDF&T=&Y=&D=&FID=1001201800&iid=4004124

xli Coolidge, Alexandar. “Proctor & Gamble’s Global Reach Changing” USA Today. Sept 7, 2014. (Dec 30, 2014). http://www.usatoday.com/story/money/business/2014/09/07/procter--gambles-global-reach-changing/15205713/

xlii Richardson, Rachel. “P&G Building $300M Mason Innovation Center. 17 March 2015. (30 Dec 2015). http://www.cincinnati.com/story/news/2015/03/17/pg-moving-beauty-business-mason/24913621/

xliii “Get a First Look at Our New Innovation Center in Singapore.” Get a First Look at Our New Innovation Center in Singapore. (30 Dec. 2014). http://news.pg.com/blog/company-strategy/SGIC

xliv “Asia’s Multi-Ethnic Population Inspires Innovation at P&G.” 28 May 2015. (3 Dec 2015). http://www.cosmeticsdesign-asia.com/Business-Financial/Asia-s-multi-ethnic-population-inspires-innovation-at-P-G

xlv “Procter & Gamble Steps Into 3D Bio-printing Space With Grant Competition in Singapore.” 26 May 2015. (3 Dec 2015). http://3dprint.com/68246/procter-gamble-3d-print/

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