Case Brief Summary
Business 523-Fall 2010
Exploring Innovation in Action: Connect and Develop at
Procter & Gamble
Identify major problems or challenges of the case organization or industry
The Protect & Gamble harvested great profit after they implemented their specific open innovation strategy which is called “connect and develop”. Lafley’s original stretch goal was
to get 50% of innovations coming from outside the company; by 2006 more than 35% of new products had elements which originated from outside, compared with 15% in 2000. They estimate that R&D productivity has increased by nearly 60% and their innovation success rate has more than doubled. (J. Bessant 2007) Despite these huge success, there is a big challenge posed here, how to manage and improve this innovative network and facilitate these knowledge flow effectively and efficiently?
Assess innovation management activities within the case organization and apply innovation management theories and practices to support your analysis
As a network manager, P&G did well in both managing the network inside and outside. In order to make the connections that turned data and information into useful and used knowledge inside the organization, they use multiple methods including extensive networking via an intranet site called “ask me” which links 10,000 technical people across
the globe. They also operate 21 “communities of practice” built around key areas of expertise
and operate a global-technology council, which is made up of representatives of all of their business units. (J. Bessant 2007) With respect to connecting outside partner, they still did an outstanding job. One of the applications of Internet is that as founder members of a site called InnoCentive, it links up problem-owners and problem solvers and it currently has around 90,000 solvers available around the world. The business model is simple: companies post their problems on the site and if any of the solvers can help they pay for the idea which range from $10,000 to $100,000. (J. Bessant 2007) That empowered the company an extraordinary human resource in solve problems regarding both marketing and R&D knowledge management.
Present recommendations for improving the innovation activities
Nevertheless those huge achievements P&G has made that mentioned last paragraph, there are still some tips for them to improve managing this knowledge network. First, they should pay close attention to link those R&D knowledge with marketing knowledge. One prominent situation happened before is that the success rate in R&D is low to cause remarkable lost which doesn’t meet the true needs of customers. Second, knowledge
reduction and filtering should be taking care. With these huge information sea, how to obtain the useful information and expel those useless becomes a big topic in today’s knowledge
management. Given the interaction with marketing and R&D knowledge, the information about application of high technology should always be aligned with the ongoing changing of market trends. Finally, how to protect Intellectual Property (IP) is another big problem to be addressed. Priority concerns should be concentrated with those core competencies and then,
those minor processes could be outsourced or seeking for public solutions.
Provide managerial implications
After analyzing the P&G case, there are three managerial implications deserved our attention. Firstly, widely internal and external knowledge network should be established properly to create the “open innovation” strategy. Secondly, core competencies are needed to
put No. 1 priority in managing Intellectual Property. Thirdly, Knowledge trading is a good choice to trade with other companies for useful information while others are less useful for you than your partner company. In conclusion, managing innovation network is not as easy as those theories shown in textbook. Large effort should be committed on the inflow and outflow of useful information inside and outside firms. There’s only one goal here, obtaining
right information as much and quickly as possible while keeping the investment at a minimum level.
J.Bessant & J. Tidd (2007) Innovation and Entrepreneurship John Wiley & Sons, Ltd