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In
2004, Procter & Gamble, one of the world's largest consumer
product companies, launched a new line of Pringles potato
crisps, each printed with pictures, jokes, interesting questions,
etc. The idea became an instant hit. Moreover, the idea was
quite simple. The company, instead of adopting the conventional
way of launching a new product, created a technology brief
about a product to be launched and circulated it across its
global networks of research institutions and individual researchers
calling upon them to suggest a way to print pictures, jokes,
etc., on potato crisps. The company's European network discovered
a university professor who invented an ink-jet method for
printing edible images on cakes and P&G used this method
for its Pringles. This innovative way of printing on crisps
has helped P&G in achieving a double-digit growth in its
Pringles business in North America. Had it been in the past,
P&G would have taken more than two years for the company
to launch its new product; but now P&G took less than
a year to market its product. This was possible because of
the company's innovative method of introducing new products
to the marketplace - "Connect-and-Develop".
Most
companies resort to the conventional model of innovation,
that is, development of products through R&D, with the
intention of keeping the idea to themselves. Larry Huston,
Vice-President for innovation and knowledge at P&G, says:
"Most companies are still clinging to a bricks-and-mortar
R&D infrastructure and the idea that their innovation
must principally reside within their own four walls."
For years, Procter & Gamble grew phenomenally by innovating
from within the organization. The company established several
research facilities at its centers across the globe and even
recruited the best of the talent available. But as the company
grew bigger, relying on the same model of innovation was no
longer profitable.
In
2000, when Alan Lafley became the CEO, P&G was in trouble
with its share price falling continuously. Lafley, who has
been associated with P&G for a long period as operational
head, came up with definite plans and an objective to turn
around the fortunes of P&G. It was he who initiated the
process of external collaboration. Once Lafley assumed control,
things at P&G began to change at a rapid pace. The company
emphasized the importance of consumer experience and brand
growth, which broadened the company's thinking from just product
attributes that meet consumers' requirements to much more.
Company sources say that its industrial design now is much
more integrated into the innovation process than it was in
the past. |
