Inside Procter and Gamble's innovat

Inside Procter and Gamble's innovation machine

By Patricia Sellers

A. G. Lafley, the CEO of Procter and Gamble, has brought a lot of creativity and rigor to P&G's innovation process. During the past 2 years. P&G has raised its new-product hit rate (the percentage of new entries that deliver a return above the cost of capital) from 70% to 90%. That's terrific in an industry where half of new products faiL within 12 months, according to market research firm Information Resources. "In the 18 years that I've followed Procter," says Deutsche Bank analyst Andrew Shore, "I have never seen the company this good".

Organic growth - meaning growth from core businesses, excluding gains from acquisitions - is at the root of P&G's transformation. According to Lafley, organic growth strengthens a company's ability to innovate.

Coke, Kraft and Unilever are just a few of the giants that are, struggling to innovate and build me brandsthey already have. According to a recent Boston Consulting Group survey of senior executives, more than two-thirds say innovation is a priority, but 57% are dissatisfied with the returns on their innovation investments

Lafley has a model for innovating in a big company:
1. One-on-one consumer research

Jim Stengel, Procter's Chief Marketing Officer, has cut his reliance on focus groups - the conventional method for studying consumers. "You don't really learn anything insightful," he says, contending that P&G and its rivals have already met consumers' obvious needs and that today's opportunities lie in meeting needs that consumers may not articulate. So he has urged the marketers to spend lots of time with consumers in their homes, watching the ways they wear their clothes, clean their floors and asking them about their habits and frustrations.

2. Get employees to exchange ideas
Procter and Gamble has 7,500 R & D people located in nine countries. In order to collect feedback over this vast area, the company encourages employees (both scientists and marketers) to past problems on an internal website. Lafley evaluates the ideas that have been shared belweeiTImployees. Each year he presents his findings in half-day "innovation reviews" for each business unit.

3. Reach outside for ideas

Lafley says that his goal is to get half of P&G's invention from external sources, up from 20% four years ago and about 35% today "Inventors are evenly distributed in the population, and we're as likely to find invention in a garage as in our labs," he explains.

4. Stop testing so much

It's not the P&G way to put out a product without test-marketing it. But consumer testing takes time - a luxury that P&G executives increasingly don't have. Says Susan Arnold, P&G's beauty queen: "We don't have time to cross all the T's and dot all the I's.This business is trend-based and fashion-based. You have to be intuitive." By cutting down on test-marketing (but net, mind you. on science), P & G has reduced product launch time from laboratory to roll out from three years to eighteen months company- wide.

5. Give designers more power

Lafley believes that P&G needs to market not just the product itself but the consumer's experience of the product - how it looks, smells and feels. Three years ago he added a head of design at P&G, a company veteran named Claudia Kotchka. who reports directly to him. Her designers used to labour in anonymity on logos and packaging. But they are now deeply involved in all aspects of product development. For Olay Regenerist, they helped with the formulation and the fragrance too.

6. Know what not to do

In an attempt to encourage growth, some companies offer fat bonuses for innovation or hire stars from outside. Lafley hasn't done either of those things. He doesn't need to revamp pay schemes, he says, noting that managers who fail to share ideas simply do not get promoted. He does motivate the rank and file by giving out modest rewards, such as giving 50 stock options, for creative ideas and by celebrating innovators on P&G's internal website.

From Fortune Magazine

Результаты (русский) 1:

Внутри машины Проктер и Гэмбл инновацииПо Патриция СеллерсА. г. Лафли, Генеральный директор Проктер и Гэмбл, принес много творчества и строгость P & G в инновационный процесс. В течение последних 2 лет. P & G поднял свой новый продукт хит ставка (процент новых записей, которые обеспечивают возвращение выше стоимости капитала) от 70% до 90%. Это потрясающий в отрасли, где половина новых продуктов терпит неудачу в течение 12 месяцев, согласно исследованиям рынка фирма информационные ресурсы. «В 18 лет что я следовал Проктер,» говорит берега Эндрю аналитика Deutsche Bank, «Я никогда не видел компании это хорошо».Органический рост - смысл рост от основных предприятий, исключая выгоды от приобретения - находится в корне P & G в трансформации. По словам Лафли органического роста укрепляет способность компании к инновациям.Кокс, Крафт и Unilever являются лишь немногие из гигантов, которые стремятся к инновациям и построить меня brandsthey уже есть. Согласно недавнему обзору Бостонской консультативной группы старших руководителей более чем две трети сказать инноваций является приоритетом, но 57% недовольны возвращается на свои инвестиции в инновацииЛафли имеет модель для инновации в большой компании:1. индивидуальные потребительские исследованияJim Stengel, Procter's Chief Marketing Officer, has cut his reliance on focus groups - the conventional method for studying consumers. "You don't really learn anything insightful," he says, contending that P&G and its rivals have already met consumers' obvious needs and that today's opportunities lie in meeting needs that consumers may not articulate. So he has urged the marketers to spend lots of time with consumers in their homes, watching the ways they wear their clothes, clean their floors and asking them about their habits and frustrations.2. Get employees to exchange ideasProcter and Gamble has 7,500 R & D people located in nine countries. In order to collect feedback over this vast area, the company encourages employees (both scientists and marketers) to past problems on an internal website. Lafley evaluates the ideas that have been shared belweeiTImployees. Each year he presents his findings in half-day "innovation reviews" for each business unit.3. Reach outside for ideasLafley says that his goal is to get half of P&G's invention from external sources, up from 20% four years ago and about 35% today "Inventors are evenly distributed in the population, and we're as likely to find invention in a garage as in our labs," he explains.4. Stop testing so muchIt's not the P&G way to put out a product without test-marketing it. But consumer testing takes time - a luxury that P&G executives increasingly don't have. Says Susan Arnold, P&G's beauty queen: "We don't have time to cross all the T's and dot all the I's.This business is trend-based and fashion-based. You have to be intuitive." By cutting down on test-marketing (but net, mind you. on science), P & G has reduced product launch time from laboratory to roll out from three years to eighteen months company- wide.5. Give designers more powerLafley believes that P&G needs to market not just the product itself but the consumer's experience of the product - how it looks, smells and feels. Three years ago he added a head of design at P&G, a company veteran named Claudia Kotchka. who reports directly to him. Her designers used to labour in anonymity on logos and packaging. But they are now deeply involved in all aspects of product development. For Olay Regenerist, they helped with the formulation and the fragrance too.6. Know what not to doIn an attempt to encourage growth, some companies offer fat bonuses for innovation or hire stars from outside. Lafley hasn't done either of those things. He doesn't need to revamp pay schemes, he says, noting that managers who fail to share ideas simply do not get promoted. He does motivate the rank and file by giving out modest rewards, such as giving 50 stock options, for creative ideas and by celebrating innovators on P&G's internal website.Из журнала Fortune